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How Fintech Data Allows Banks to Improve the Financial Health of Their Customers

With digitized banking setting the new standard for financial institution customer relations, big banks should look to leveraging customer data to ensure the best individualized financial service possible.

For decades now, financial institutions washed, rinsed, and repeated their systems, offerings, and services to loyal customers relying on their size and reach to keep these customers without having to change.

“Today we find ourselves deep in the age of information sharing and artificial intelligence automation; capabilities that pose a threat to these traditional institutions prone to losing customers to more forward-thinking fintech banking alternatives.” Says Connie Testa, CSS TEC Managing Director.

Why is this transition important?

While we could write a 10-part docuseries on the importance of this transition from static services to dynamic data-driven offerings to banking customers, a central factor happens to be the inevitable passing of wealth from the Boomer generation to their offspring who have a completely different idea and standing of financial health and wellness.

As noted previously, without big banks adjusting to this next generation of wealth inheritors needs and financial mannerisms, they risk these generational customers moving elsewhere to banks using organized data to better-cater to these new customers. Speaking of data usage and new-age financial offerings….

Examples of fintech systems using data to best-serve customers

Banks that have recently integrated data analysis to offer customers individualized offering depending on their own financial habits use a number of tools to do so. APIs connect organizations with data and organize it accordingly monitoring everything from diversity and frequency of spending habits to typing pace and speech recognition to determine fraudulent activity in a customer’s account.

Instead of a bank assuming an age-old account is still operated by a “student” who may have opened the account before they kept it through maturing employment and have different financial needs, banks with instantaneous customer spending and saving data are more dynamic and able to offer appropriate financial assistance to the customer as they are currently.

For example, IBM global CTO John Duigenan notes that one credit card he has flags “fraudulent” activity when he enjoys a Michelin-star meal or purchases a luxurious vacation because it does not monitor his day-to-day spending and has not caught up with his current financial capabilities and desires due to a lack of interpreted data.

Data Fabric, IBM’s solution to archaic silos (and even duplicated) customer data, is a data architecture solution using end-to-end data management capabilities to automatically store, govern, and organize customer data in real time to add value and insight into what a financial customer really needs.

Requirements from the customer side

Data usage allowance from the customer is an impactful ask from your bank, and to do so requires full transparency and content on the part of the customer for institution usage. Banks are required to comply under government data legislation as well as Gramm-Leach-Blily Act (GLBA) ensuring no data will be taken and used without customer consent.

While consenting to banks using your data sounds exposing, let’s think of your financial health the way you do your bodily health for a minute. You give your blood sugar, heart rate, sexual health notes, and more to your general practitioner in order to receive the best personal solution to your problem as possible. Think of your financial health in the same manner. Once you build trust with you bank, doesn’t it make sense to lend them your financial habits and goals so they’re able to provide you with the most-personalized financial service for thriving financial health? The doctors and data analysts would agree.

About CSS Tec:

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