Page 133 - Building Big Data Applications

Chapter 7 Banking industry applications and usage 131

services. Services not only provide a better experience but also foster a longer-term
customer relationship and earn trust and loyalty eventually.
Ideate and develop new business prototype, test, refine and rapidly develop,
design, and deploy business capabilities
Transform the vision and mission statement to become digital as a constant capa-
bility and not as an “off-the-shelf” product or a one-off way of doing things.
These are some foundational thoughts and today all banks of any size and shape have
transformed their service portfolio and are emerging more digital than ever before. Add
the emergence of cryptocurrency, blockchain, and more open-ledger transformations,
we are looking at a completely different future for banking. This is the tipping point of
FinTech and its evolution to digitize the entire spectrum and create a future bank.
FinTech’s (or new age financial industry startups) offer a different model of customer
experiences designed and developed on customer on product innovation and agile
business models. The innovation is delivered by reducing some profit shares but instead
they benefit by getting more usage and activity, all of this focused around contextual
products tailored to individual client profiles. The increased ability of business subject
matter experts in analytics and, the savvy use of segmentation data and predictive an-
alytics enables the delivery of bundles of tailored products across multiple delivery
channels (web, mobile, point of sale, Internet, etc.).
Compliance is mandatory requirement for banks in areas around KYC (know your
customer) and AML (antimoney laundering) where there is a need to profile customer
both individual and corporate to decipher if any of their transaction patterns indicate
money laundering, etc. Due to these compliance requirements, banking produces the
most data of any industry that pertain to customer transactions, payments, wire trans-
fers, and demographic information. However, it is not enough for financial service IT
departments to just possess the data. They must be able to drive change through legacy
thinking and infrastructures as the industry changesdboth from a data product as well
as from a risk and compliance standpoint. FinTech’s are not mandated to be regulatory
compliant and the technologies support multiple modes of payments at scale, however
the banking regulatory bodies mandate that when a FinTech is brought into the bank, it
must pass all compliance requirements.
The business areas shown in Fig. 7.2, are a mix of both legacy capabilities (risk, fraud,
and compliance) to the new value-added areas (mobile banking, payments, omni-
channel wealth management etc).

Business challenges facing banks today
Banks face business challenges across three distinct areas. First, they need to play de-
fense with a myriad of regulatory and compliance legislation across areas such as risk
data aggregation and measurement and financial compliance, and fraud detection.
Second, there is a distinct need to improve customer satisfaction and increase loyalty
by implementing predictive analytics capabilities and generating efficient insights across
the customer journey driving a truly immersive digital experience. Lastly, banks need to