Using data to futureproof financial services
Last year, you probably heard the word resilience one too many times. The snap transition to a remote working model removed the comfort and stability of the office. Industries across the world faced impromptu cloud transformation, as physical premises closed, and office blocks sat empty while employees worked from home.
While it’s great to see financial organisations embracing new technologies – particularly when historically, the uptick has been slow – this sudden move could also leave them more vulnerable to security risks. Many firms shifted their business to the cloud as remote working increased. But ideally this sudden move should have been more controlled and calculated than it could be at the time.
The pandemic brought disruption and innovation to the financial sector. Over half of the world’s population now use banking apps more than ever, and the demand for new digital services continues to grow. From open banking to in-app chatbots, futuristic features mean more unstructured data is filtering through the system. Combine that with the legacy content that’s never been correctly managed, and you’ve looking at an unexplored ocean of information.
As the world begins to open up, financial services firms must take the opportunity to build resilience into their operations. The events of 2020 show that global needs can change overnight, and by providing a sense of stability and consistency, firms can reassure customers they’re able to steer the ship through any storm.
This of course, starts with good systems and protocols. When customers choose a financial services firm, they’re paying with their trust. The protection of their data is merely a basic expectation.
Closing the operational loopholes
Structured data is simple to manage. By nature, it’s easier to locate, categorise, and analyse than its unstructured counterpart. Firms can learn a lot from their structured data. But they can’t learn everything.
It’s easy to slip into a siloed approach when there’s a wealth of information for a business deal with. But in order to get reliable data analytics, firms need to understand both unstructured and structured data. Unstructured data that isn’t properly managed and organised is virtually unusable. Which leaves firms vulnerable to risk, and likely to breach regulation.
Customers too, are demanding more transparency. With the rise of challenger banks and open banking, there’s a renewed emphasis on honesty. Conversations once held in a boardroom now live on slack or email, which leads to enormous amounts of information distributed via multiple channels. That’s not to say in-person conversations are more secure, they’re just not as traceable. Considering 95% of IT leaders say client data is at risk of breach via email, it’s only a matter of time before firms overlook a loophole in their system and land themselves a fine. And when these discrepancies start to stack up, the reputational damage can be catastrophic.
Future planning when the future’s uncertain
Let’s be clear – good governance is merely a starting point. Utilising a data management platform such as hivera enables firms to assess the likelihood of breaching regulation and track potential security threats.
And when firms get the data management part right, it opens them up to all kinds of opportunities. For example, when regulatory and security risks are tracked and intercepted, the capital that would have been spent on fines can be diverted towards profit-making pursuits like marketing, product development, and customer services. There’s no better way to ensure business longevity than by consistently meeting the needs of the customer.
When compliance is no longer a concern, firms can take strategic risks in other departments, knowing they won’t be facing any unexpected regulatory reparations. Analysts can assess the company’s risk appetite and tailor operations to meet future goals.
And this attention to detail incentivises customers to stay loyal. As we’ve already explored, there’s no shortage of competition from new and seasoned contenders, should a firm slip up or slack on data protection. Fraud prevention is vital to customer retention and pays dividends when it comes to long term reputation.
It’s important to note too, that manual processes are resource heavy. Time, money, and people power spent on troubleshooting compliance issues would be much better placed in customer-focused activities. AI data management systems are faster, and consistently more precise at spotting weaknesses. Evidence of compliance is much easier to locate when unstructured data is organised and regularly updated, saving firms and regulators time and money.
Throw the crystal ball away
As we saw in 2020, the world changes quickly. So does regulation. But when firms have full visibility over their entire data estates, they spend less time locating information, and more time on high value work that drives profit and customer retention.
Resilient operations start with resilient teams and providing employees with the tools to properly organise unstructured data makes spotting regulatory weaknesses a less overwhelming task for compliance professionals.
Financial services firms can create a sense of stability for customers in uncertain times. Customers will remember the businesses that have their best interests at heart during challenging climates. It’s only when firms understand the full extent of their unstructured data, that they can use it to its full potential. Because when businesses know exactly where they stand, they can start moving towards where they want to be.