Fintech: Improving data access for financial institutions
Data is the new currency in today’s financial landscape, and the fintech industry is at the forefront of leveraging technology to solve problems and create better financial solutions.
Financial organizations are competing to digitally transform their business, and in a world where the financial backlash is uncertain, customers are demanding so much more, with increased data volumes, new data management guidelines and cyber threats on the rise. Different ways of managing data can be a useful tool to solve some key problems in the financial industry.
Fintech has disrupted traditional banking, bringing innovation to a sector once considered immutable. The influx of new players has challenged the status quo, forcing financial institutions to adapt and leave old systems behind, or risk becoming obsolete.
There is now an incredible opportunity for financial services to leverage the data at their fingertips by leaning on the solutions the fintech industry offers. This will help them navigate the new landscape, improving data access leading to more efficient and customer-centric services, meaning banks can remain competitive in an increasingly digital world.
The innovative power of data
Data is at the heart of financial services, from credit scoring and loan approvals to fraud detection and regulatory compliance. The sheer volume of data generated by financial transactions is staggering, and the need to access, analyze and manage this information effectively is more critical than ever.
With this in mind, there are three key areas where the fintech industry can drive improvements in data access for financial institutions: data security, data interoperability and data analytics.
Data security must now be at the top of the agenda for all organizations as cyber threats increase with research showing that organizations experienced a 77% increase in attacks in 2022. For financial services this poses a worrying threat as they exist as a prime target for criminals looking to exploit information due to the lucrative nature of the data they hold.
The fintech industry offers innovative solutions to protect data from breaches and unauthorized access, offering advanced encryption techniques, multi-factor authentication and blockchain-based solutions. These advanced forms of technology can help banks and financial institutions protect their customer data, build trusting relationships while protecting against reputational and financial loss.
Create an agile approach
In addition, data interoperability is essential in today’s interconnected financial ecosystem. Customers are increasingly relying on multiple financial providers while still expecting a high level of customer service and a seamless experience.
Current legacy systems used by many traditional banks are often cumbersome, lack the flexibility and adaptability required for smooth data exchange, and provide a slow and fragmented service to their customers.
Fintech companies can offer solutions to this, promote the creation of open banking standards and APIs that enable the integration of services between different players in the market, create an agile approach, improve collaboration and improve the process of data sharing.
Finally, the improved use of data has the potential to improve business operations by transforming the way financial institutions make decisions, manage risk and serve their customers. Data-driven decision-making, driven by technologies such as artificial intelligence, machine learning and big data analysis has now been made possible through the solutions offered by the fintech industry.
The fintech industry is positioned to empower financial services, providing analytical tools that will not only improve their operations, but tailor their services to individual customer needs so they can remain competitive.
Technological financial institutions
Essentially, by rethinking the use of data and incorporating the offerings the fintech industry can offer, financial institutions will be able to streamline operations, improve customer experiences and make better informed decisions, ultimately driving growth and increasing market competitiveness.
The fintech industry has a unique opportunity to drive significant, positive change and improve data access for financial institutions. It is now both the responsibility of the financial services to take over and implement the offers they are now exposed to, as well as the fintech providers, to continue to offer innovative solutions to improve operations.
By working together, the fintech industry can help transform traditional financial institutions, unlocking a reformed, more efficient and secure future for the financial world, while enabling a customer-centric approach that will ultimately drive business growth now, and in the future.
