Intel at Innovate Finance: Addressing the data challenge and AI – Next steps for banks
Who owns a customer's data? Is it the individual or the financial institution (FI) they offer their information to? These questions, combined with discussions around the application and monetisation of data, dominated the agenda at this year's Innovate Finance.
The opportunity for banks is clear. FIs that unlock the potential of the data they hold and make it the focal point of their entire organisation will be able to safeguard the future of their business in an increasingly complex and regulated market.
A key part of this is empowering customers to understand and monetise their own personal data. If customers understand the value of their personal information and how they can control the potential benefits it can provide them with, they are going to be far more inclined to share it. They still own their own data, they are just taking greater control of how and in what capacity it is used. This requires increased communication and trust between institution and user. Banks therefore need to establish a platform for innovation within their organisations where the relationship between customers and banks is far more transparent.
Banks are aware of the potential value this can bring to their organisation but are yet to fully implement the changes needed to bring it to fruition as part of a wider digital transformation strategy.
Whilst banks have historically collected data, they haven’t monetised it in the same way as today’s digitally-led organisations. Facebook is built and thrives upon data. Banks also have an opportunity to monetise their data differently, both in terms of scale and type. If Zuckerberg’s business which is barely into its teenage years can send PGP-encrypted messages to its users by combining hardware, software and biometric solutions why can’t the world’s biggest banks?
At Intel, we’re working with banks to understand how they can address their business constraints, reduce trading times, and ultimately equip themselves with the insights they need to develop transformational products and services. Data lies at the heart of these conversations, but as information increases in volume, the chances of it hiding the insight rather than revealing it increases. This is crucial to understand if banks wish to unlock value.
Here’s how this issue has grown: the typical person gives out 1.5 GB of data per day, whereas machines, heavily adopted as automation, with AI and machine learning becoming de rigeur in FIs, send out 4TB of data daily. Having the right tools to translate this explosion of data into insights is ever more important, especially if banks plan on monetising it.
Organisations are starting to increase their talent pool to address this. Think of the appointment of data protection officers, for example; but more commitment is needed to carry this momentum.
Regulatory compliance, changing consumer habits, and the emergence of new competitors are all key considerations. Ultimately, FIs need a platform that drives and encourages innovation. That platform, driven by a more focused data strategy, not only needs to deliver value and new services to customers, it also needs to introduce technology across the entire organisation to drive it forward. That could include blockchain, Artificial Intelligence (AI), IoT capabilities, from edge to cloud, as well as new hardware and software which supports and powers any new investments or initiatives.
AI is one of the key technologies available to banks that can ensure they remain relevant to their customers. The insight AI solutions can generate is vast, and can inform business decisions. AI is perhaps one of the most effective tools banks can have in their armoury to interact with their customers on a far more personal level.
AI capabilities, like the Intel® Nervana™ platform and Intel’s Saffron Technology Cognitive Solutions, are perfectly placed to equip FIs with the capabilities they need to process huge data volumes in a far more effective manner, and provide actionable insights. But, for innovations of this regard to thrive, banks need to have first created an environment in which they can succeed.
Banks are at the start of this journey. They need to ensure they have fully identified how they can make the most of the opportunities richer data insights provide, both for their organisation and their customers.