How data in motion can accelerate growth in financial services - three tips for success

Profile picture for user Richard Koh By Richard Koh November 11, 2021 Audio mode
Traditional banks are struggling to keep up with new digital entrants and FinTech companies. But banks do have a wealth of experience, talent and data that, if harnessed and put into motion, can lead to success.

An image of banks in Canary Wharf in London
(Image by WikiImages from Pixabay )

Today, CEOs and CTOs all over the globe are locked in a permanent struggle to evolve products and services to match the growing swell and shifting demands of an increasingly informed customer base. Nowhere is this felt more acutely than in today's financial services organisations. However, the global economy has shifted dramatically in the wake of the pandemic, making this process all the more complex.

With consumers increasingly expecting that all the services they use should be available online, more and more of today's organisations are turning into software businesses by proxy. A traditional bank dabbling in digital services needs to stay relevant and meet customers expectations to stay competitive with digital native banks. These legacy banks have history, experience, knowledge and a wealth of data they can use to their advantage with the right infrastructure and skills.  Agile FinTech companies however, offer exemplary customer experiences and streamlined services as a standard.

History is littered with examples of organisations that became obsolete because they failed to adapt in time. And, often, it isn't because they didn't see the change coming, but because actually making the changes required is extremely hard — particularly when your organisation is large, complex, and stuck in a legacy mindset.

So how do you solve a problem like continuous innovation — and where do you start to align your stakeholders and rally an entire organisation around potentially massive operational changes?

The importance of data in motion

The good news is that there's an abundance of primary and secondary data sources, not to mention third party information at our disposal that can help shape what needs to happen next. The not so good news is that bringing it all together and actually defining a signal in the noise and eliminating false positives, outliers and other misleading data points is extremely difficult.

The world's biggest organisations employ hundreds of data engineers and scientists to tackle precisely this problem. But fundamental to decoding it all — and extracting the answers to the questions you didn't even know you needed to ask — are integrated systems, and a data infrastructure that's set up to support the business in real time.

What we call data in motion brings together all your databases, applications and tools and creates a unified system that provides ubiquitous access to all the data you store in real time.

What does that mean? Well, it means that if you're a financial services institution looking to prevent fraud and keep your customer safe, you could analyse, detect, and prevent fraud from happening in real time with properly connected applications and data. For example Confluent is helping Morgan Stanley provide better fraud analytics with real-time streams of data.

Customers' tolerance for poor experiences — or even suffering an instance of fraud — have dropped to near zero. It is too easy for them to find a competitor, move their money to another bank or simply adopt a different service.

Data in motion enables you to harness data flow across the organisation and react to it continuously. You can now constantly revise, improve, tweak, refine and enhance your products, services and customer experience. The hard part is putting those insights into practice.

Access the right talent

It's a cliche, but people are the biggest asset to any company, no matter the field. But they can also become the biggest blockers of innovation if you can't access or train the right talent fast enough.

As more and more organisations become digital software companies, the competition for the best engineers and developers is fierce. We are in the midst of a digital skills gap where businesses have an appetite for change and a wealth of data to help them do it — but are nonetheless stagnating, simply unable to move at the pace they want or need to survive.

Consider this: up-skilling a team can take anywhere from 6-12 months, at a minimum, at considerable expense to the business. This kind of pause on critical innovation will prove too much for many businesses, who'll be left in the dust as other, more agile organisations with continuous development-to-production pipelines power on and forge new paths.

But there is a short-term solution:finding the right partner with the necessary skills and capabilities that can help you harness your data effectively. The very best partners will even train up internal teams while accelerating your transformation efforts, ensuring you have the skills you need to succeed in the long-term.

Align stakeholders and shift thinking

Beyond the skills gap, one of the more common challenges we hear about at Confluent is convincing key stakeholders of the power of data in motion as a new data architecture.

Questions are asked about maturity, security, and a whole host of other issues around total cost of ownership, tech debt and internal skill requirements. The truth is, data in motion is well-established, pays for itself almost instantly, and offers incredible developer experiences that fuel pioneering, business-focused products based on actionable insights. We regularly bring our current customers into discussions to share their own experiences with prospects.

From my experience, I see two types of C-suite leaders. The first are hungry to innovate, and see no problem as insurmountable. These leaders want to move their organisations away from commodities, and use data to create memorable experiences, better understand their customers, and deliver the right change for their organisations.

Then, there's the group for which change feels just too hard and complex. They hide behind their legacy investments, mainframes and infrastructure, blaming digital natives for muddying the waters and taking too many risks.

Mindset is everything for those in the latter camp — and the only way to convince them otherwise is to show them a new reality.

How Bank Rakyat Indonesia (BRI) uses Confluent to improve its market position

As one of the largest banks in Indonesia — and the largest microfinance institution in the world — BRI is a huge organisation. Driving transformation in such a complex business takes considerable effort, the right talent, accurate data, and true agility to ensure things keep moving.

By leveraging the Confluent Platform and Apache Kafka, BRI has been able to use event-driven architecture to power real-time analytics for credit scoring, fraud detection and merchant assessment services.

Among the innovations delivered by event streaming are:

  • A system that detects anomalous customer transactions in real time
  • An ISO 27001 certified open API that connects BRI with a digital ecosystem of partners
  • An early warning system that identifies customer at risk of payment default
  • And a microlending app, named Pinang, helping BRI reach untapped new market segments

Deliver continuous innovation by harnessing your data

While access to talent is an industry challenge, moving to a more digital first and agile mindset is not. Data in motion infrastructure allows organisations to make use of the data at their disposal to fuel better decision making, create better, real-time experiences for customers, and create products and services customers need.

Confluent offers clients a foundational platform for data in motion, allowing businesses to harness the full power of continuously-flowing data to innovate — and win in the modern digital world.