The data challenge for the finance industry

June 1, 2023

The Chief Product and Technology Officer at Spendesk recently discussed the benefits of data for the finance industry. In our digital world, finance and fintech companies consistently look for ways to use data to deliver more personalisation and relevant services.

Product-related data provides vital insights into behaviours, choices and customer demands, which can support the financial services industry to deliver customised financial products. However, the application of in-product data does create privacy concerns. To strike a balance between utilising the value of data and protecting privacy, the finance industry must implement a customer-focused approach toward data management. 

The fintech industry is an exciting space and while there has been a broader slowdown in investment, the fintech space still can adapt and pivot easier than banks and traditional financial institutions. The agility aspect is critical in times of economic uncertainty when things may need to change quickly. The rise of digital connectivity is providing businesses access to accurate, real-time data that can be applied in a meaningful manner.

The benefits of data cannot be ignored and utilising it in intelligent ways offers significant opportunities for fintech companies. For example, business spending management enables companies can gather so much information from the data collected on employee expenses. Spend management solutions can support business leaders and their CFOs to create spending limits and provide enhanced visibility when examining and allocating budgets. 

A CFO that can show these types of cost efficiencies in the current economic conditions will be in a favourable position. Solutions that utilise AI enable the finance industry to measure large volumes of data, identify trends and apply this information to deliver bespoke financial products and services that meet the requirements of each customer. A financial institution might use data to determine which savings or investment products are the most popular with various demographics, and use this info to create customised financial products that work specifically for those customers. 

One important element of a customer-centric approach is implementing secure data protection policies and processes. The finance sector is heavily regulated, so should be capable of adhering to data privacy regulations. Any customer data has a potential risk, so companies must recognise liability issues and apply the necessary measures to control them. Aside from liability protection, prioritising privacy builds trust with customers. Recent research from Google and Ipsos suggests that 43% of respondents would move from their preferred brand to a second-choice brand if they offered a better privacy experience. 

Another critical part of applying a customer-centric approach is providing individuals with more control over their data. For example, businesses can provide customers with secure online portals to access and manage their data or provide an option to manage who has access to their information and how it is used. It’s vital to consider all opportunities available to build trust with customers while ensuring that data is handled responsibly and ethically. If your business uses data protection policies and processes, remains transparent on data collection and gives customers more control over their data, the data challenge can become a data opportunity. This opportunity can be enhanced by using innovative technology that equally benefits both businesses and their customers.


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