How legacy data systems fail traditional banking customers, and how B52 is changing all that
Think of a library. You remember libraries don’t you? They have every kind of book, from detective novels to cookbooks, to romantic poetry. If you want to find a detective novel, you go to the crime section – simple! You don’t expect to find a cookery book in the crime section, and that’s the way it should be, with everything organized into the appropriate category.
This is rather how traditional banks organize their data. It may seem logical at first, but there is no parallel cross-checking ability, with each piece of data tucked away in its own silo. This is typical of old data ‘heritage’ systems which were created on a model which is no longer applicable to the contemporary world. It’s really analogous to paper filing systems, which is where the old banks remain stuck. Silo-ed data means inefficient and hard-to-access data, and it means a failure to ‘join up the dots’ and see the whole picture. In practice the result is that many banks are only using about 1% of their available data effectively.
You can see how data can be effectively mined when you examine the analytics available through platforms such as LinkedIn and Facebook, where there is in-depth cross referencing of very many factors of a user’s profile. This of course includes age, nationality, sex, location, job, significant others, as well as numerous lifestyle interests and choices. Within a very short time it’s possible to see all sorts of likes, dislikes and special interests that an individual may have, and link these up to target, and serve their needs.
Banks are also sitting on a treasure trove of information about their customers, but they’ll never use it, because – like a library – the books are all ‘on different shelves’. The data systems used by the traditional banks will never release that information from the silos that it’s locked into, so the banks will never be able to leverage the knowledge. More importantly, the customers will never be able to access products and services which could potentially interest them – if only the bank would let them know about suitable offers. So the banks lumber on, occasionally taking the time to launch a ‘new product’ which is broadcast to the majority of its customers, rather than being targeted at those who might be specifically interested.
What’s more, the banks are suspicious of sharing any data they might be able to access with potential partners, because the whole business model of traditional banks is based on monopolizing their access to customers, and charging for every ‘service’.
Compare this situation to the future way in which banking data will be used, as exemplified by the B52 approach. Unhampered by legacy systems from another age, B52’s data management – using machine learning and Artificial Intelligence – means that customer data is contextual, suggested, and predictive. The bank knows each customer at an individual level, and can follow their lifestyle, providing what is needed, when it is needed. The involvement can be active or passive, providing whatever the customer needs, however they need it. And of course all the information is completely secure. As Braintribe, one of B52’s lead partners, characterizes big and smart data use: ‘It integrates, translates and normalizes any kind of data to make it executable, extensible and expressive.’
So perhaps you really are looking for a detective story in the cookery section of ‘the library’! If there’s a potential match, the B52 system will find, and suggest it. More realistically, age-appropriate, relationship-appropriate, work-appropriate packages from the bank’s third party ecosystem will be found and offered. It’s similar to the way airlines currently suggest travel and health insurance once you’ve booked a trip, plus accommodation and car hire.
This is not just one-way traffic however. The bank’s financial ecosystem allows B52 customers to easily search for products and services, and then pay for them seamlessly using any asset. It’s a far cry from the silo-ed inflexibility of the traditional banks.
This really is the future of banking, with easy to use, easy to access apps which match and enrich the lifestyle of customers, and allow communication for the benefit of all.
Now which is the shelf with the Romantic Cowboy Poetry Recipes?
Why Banks Must Become Smart Aggregators in the Financial Services Digital Ecosystem
Bridging The Data Gap Between Legacy And Modern Data Systems