The financial services industry is in the midst of a defining transformation that is largely driven by its customers. Contactless payments have exploded during the pandemic as society moves towards more secure and efficient payment models. FinTech allows traditional institutions to catch up with new banks to innovate in the way they offer new services to meet consumer needs. From mobile banking apps to chatbots that improve the customer experience, to machine learning to protect against fraud. As we move ever closer to a digital and cashless society, how will FinTech use and protect customer data?

Data brings you closer to customers

Although the pandemic has accelerated the shift to cashless payments, in part due to its more secure contactless nature, we were already heading in that direction. A PwC India report has documented the surge of digital payments in India over the past few years – 48 billion digital transactions were recorded in 2020 despite the COVID-19 pandemic.

Phrases like “data is the new oil” have become a common refrain, but the real benefit is in what you do with the data you collect. This is how you truly understand your customers. Cashless customers have created rapidly changing consumer needs. They demand more customization and at the same time expect the products to offer simplicity and ease of use.

The explosion of online banking apps and contactless payments not only meets these expectations, but also provides more efficient payment models. Looking ahead, financial services leaders must leverage key insights to deliver exceptional customer experiences that not only meet current needs, but also provide incentives for the future.

Leverage data and analytics

As digital payments enable financial services institutions to better understand their customers, the risk of customer data being exploited by fraudsters is becoming a major concern. And it’s easy to see how these concerns arise, especially for those used to cash payments that leave no digital footprint. With the democratization of data, consumers are much more aware of their digital footprint and often ask themselves: when making a purchase, who is using my data and what are they using it for? Not to mention the increase in data breaches and cybercrime during the COVID-19 pandemic.

But the good news is that in addition to adhering to local data protection laws, financial services institutions can use data and analytics to identify emerging threats and provide insights to predict and alert to potential fraud. Harnessing the power of data in this changing environment will help financial institutions predict consumer behavior and be alert to potential risks.

Where do we go from here?

To embrace this digital reality, traditional financial institutions are rethinking their existing technical setup and investing in modern data and analytics tools to help understand customer needs and accelerate digital transformation. Businesses need an analytics platform that not only helps customers see their data, but also helps with data governance, data preparation, data access, management of data and choice of where data is stored – especially important for highly regulated industries like the financial services sector.

Data is at the heart of the digital transformation of the financial services industry, it holds immense potential for the sector and companies are scrambling to reshape their business models to take full advantage of this potential. But old systems and the lack of relevant skills can create huge obstacles.

It’s a rapidly changing world for the financial services industry and to thrive in it, companies must now offer their customers seamless, seamless and integrated services. Those who make the most of their data will thrive, those who don’t will face an uncertain future. A cashless society has many implications and using data and analytics tools is the way to best prepare your business for this new era.



LinkedIn


Warning

The opinions expressed above are those of the author.



END OF ARTICLE