Vast amounts of data could power a new era of digital banking. The ability to better understand customers, provide the right product at the right time and to the right person, will be increasingly driven by data.
“Big Data is the new oil for financial institutions, and one advantage a lot of technology companies have across Asia, is that they’re looking at many different data points,” explains Zennon Kapron, Founder and Director of market research firm Kapronasia.
For instance, Tencent, which runs WeChat in China, has data from over one billion users on its messaging platform,1 while Baidu is the country’s largest search provider and Alibaba is the biggest e-commerce platform, all with vast tranches of customer information.
“Their ability to judge the creditworthiness of a commercial customer is much better, in many cases, than banks around China,” states Mr Kapron.
At the same time banks worldwide are digitising their businesses. In one global study 85 per cent said that implementing a digital transformation program is a business priority for 2018.2
“A lot of the data used to be a point-in-time collection,” says Surendra Rosha, Managing Director and Head of Financial Institutions Group for Global Banking, Asia-Pacific at HSBC. “This is now moving to a much more dynamic and continuous approach.”
In time, data, data analytics and Big Data could lead to a revolution in what banks offer clients. It could also help drive new possibilities.
“It’s about how we can make better use of our available data, and also partner with our clients, academia, tech companies and venture capitalist to get a bigger, fuller picture on the value of data and create the best solutions,” explains Dr Ladina Caviezel, Head of Digital and Smart Analytics Consulting, Asia-Pacific for Swiss Re.
Data fuelled technology such as blockchain will allow banks and collaborators to share data, leverage it between different databases, countries, users or counter-parties. This could in time make data-driven services more powerful.
“Customers bank with us across multiple institutions, and they want those institutions to be talking to each other. They are willing to allow those institutions to share a certain amount of data, so that the end service that they get is more efficient,” states Mr Rosha.
1 Tencent’s WeChat hits 1 billion milestone, South China Morning Post
2 Global Banking Outlook, 2018, Ernst & Young
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