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Digital startups are disrupting the finance sector; could data give global banks back their edge?

Ask an 18-34 year-old whether they would consider leaving their bank and switching to branchless banking with a technology company, such as Google or Amazon, and more than a third would say yes1.

Digital technologies have transformed consumer expectations of banking. Customers coming of age now would forgo the niceties of face-to-face service in favour of fast social customer service and instant online and mobile banking; services that are far more straightforward for startups with agile IT to deliver than banks weighed down by legacy ICT infrastructures.

The financial sector as we know it is now under pressure to change. It needs to build innovative new strategies for remaining relevant and levelling the playing field with digital competitors. And it has an opportunity to rise to this challenge by seeking allies outside of its own industry.

Banks are realising that by working with Total Communications services providers, they have an exciting opportunity to unlock the value of big data. With the guidance of strategic partners, banks can use data to improve services, inform sharper, tactical decisions about consumption habits and personalise services that meet the needs of new digital customers – all in a way that meets regulatory obligations.

At a customer roundtable in Spain, Vodafone explored the opportunities that big data currently presents to the finance sector.

Financial roundtable

Why it’s time to bank on big data

  1. Understand your customers
    Using analytics, a bank can aggregate the data on mobile devices entering a specific area, such as a town centre. The bank can start to see the habits of its customers, mapping the customer journey before they reach a point of interest, such as a bank branch or ATM, and afterwards. This can then be analysed, alongside insights, such as ages and genders, to build a deeper understanding of customer behaviours and motivations. This is all knowledge that can be fed into new services and offers that surprise and delight customers.
  2. Optimise your buildings
    Big data can provide an intelligent way of reducing the overheads of expensive physical infrastructure. By remotely monitoring assets and analysing the footfall of employees inside offices, branches and headquarters, a bank can drill into details that could help it run in a more efficient and sustainable way. If air conditioning units or lights are being unnecessarily left running on floors that are not in use, for instance, the bank can spot and rectify this.
  3. Prevent potential fraud
    Banks can use data to upsell services such as fraud prevention to customers. By tracking the location of a customer’s mobile, a bank can see when transactions are taking place, or when accounts are being accessed, at a different location to the customer’s phone – a notification can then be sent to check whether the transaction is fraudulent.

1http://newsroom.accenture.com/news/younger-generations-far-more-open-to-branchless-and-alternative-banks-accenture-survey-finds.htm