It’s the start of 2017, and many people have already blogged their predictions for the year. I won’t repeat those predictions, as the future isn’t what it used to be, but I do find it interesting to look at the common themes across them all. The standout theme for me is that 2017 is the year of The Analytic.
Data analysis to be exact. Now you can get analysis paralysis if you dwell on this too long, but data analytics will be the fuel for everything else. Effective data analysis is core to being able to leverage artificial intelligence; data analytics will be the key to unlocking the internet of things; and data analytics is essential to chatbots, augmented customer experiences and enhanced services.
Think about it: How can you deliver a decent digital service if you don’t have the data to tell you what your customers want? This then becomes the essential challenge for all incumbent institutions as their customer data is often siphoned into silos. I know that for a fact, having spent 20 years trying to create bank enterprise data stores and services. Now some banks are beginning to wake up and embrace the data opportunity and threat but, for those who are comfortable with distributed data and no ability to analyze it effectively, here’s the hard truth: You will not survive.
I’ve believed this for a long time but, with each passing year, I am sounding the alarm bell louder and louder. After all, we have argued for decades that a consistent customer experience across channels is essential. We haven’t been able to deliver it, but we’ve tried. Now we are not even talking channels anymore, we are just talking about a digital foundation that everyone accesses through open marketplaces online. We have moved from a historical, closed and proprietary architecture to an open platform structure where everyone can plug and play. But how can they do that if the data is locked in old proprietary systems that are siloed and closed?
This is going to be a key conundrum for U.S. banks, which are arguing that the only person who can access customer data is the customer. That’s a great way to lock out third-party players, shut down the aggregators and block the open systems march. However, it strikes me as being like the king who has placed his army at the gates of the castle, while not noticing that the citizens are all leaving via the back door. What is the use of having a kingdom if there’s no one in it? And that is what will happen to banks that continue to have distributed data that cannot be leveraged.
The march of the fintech community, the regulator and the customer is towards easy, convenient, proactive and personalized financial providers. Those providers are increasingly like the Amazons of the world: they know their customers digital footprint and maximize their knowledge of that footprint to the hilt. In 2017, as we watch the progression of AI, machine learning, deep learning, chatbots and personalization, any bank that keeps its data locked up in a chastity belt is missing a trick.