Data drives the financial service industry. Digital banking, either through traditional or alternative banking institutions, rely on personalized financial information made accessible through fintech organizations. Financial institutions working with the right partners can control existing data to customize and individualize the digital experience.
According to Statista the volume of data created, captured, copied, and consumed worldwide reached 74 zettabytes this year (that is 74,000,000,000,000,000,000,000). Not all of the information belongs to the financial services industry, but much of it does.
Banking as an industry creates data at every level and industry experts believe the amount of information generated now grows at the rate of 700% each second. However, business intelligence breakthroughs using data analytics have streamlined the scrutinization and assessment of a massive quantities of collected customer information.
Data analytics lets traditional and non-traditional financial institutions, assisted by fintechs, to reach transactional data to continuously track customer activities from various channels and silos.
Fintechs Unlock Big Data
Electronic interaction through devices such as smartphones, laptops, smart appliances help financial services leave a data trail, which includes transactional records as well as habits and preferences, that fintechs learned how to cultivate. The capability to process these substantial data sets permits fintechs to create smarter, personalized customer experiences.
As the number of e-records surges, financial services can aggressively use data analytics to obtain more business insights and information. Data analytics creates cutting-edge modelling methods, such as in the areas of lending and credit scoring, to deliver tailored services based on certain demographics.
Data analytics enables fintech firms to deliver personalized services and products to traditional or alternative financial institutions. Alternative banking organizations initiated the use of fintech companies to present more tailored services. The swiftness of real-time data gives disruptive fintechs and challenger banks the agility to adjust to an evolving market. Machine learning and artificial intelligence open even more new paths for the alternative finance sector for both B2B and B2C consumers.
However, fintechs using big data can also help community financial institutions, which do not have the technical firepower of some of the bigger financial institutions, to design strategies based on customer segmentation, cross-selling and up-selling opportunities, and transaction and spending patterns while also improving customer service, risk assessment, compliance and security reporting.
The fintech industry, aided in large part by artificial intelligence and machine learning, can advance at a rapid rate, if they can connect easily to the right information to amplify their proficiencies and inventory of financial services offered.
Data, Fintech and Financial Institutions
Technology has enabled traditional financial institutions to work in tandem with fintechs to harness the data for intelligent decisions. Fintech’s ability to harness big data enables financial institutions to deliver superior and more effective service to account holders.
For example, data goes hand in hand with digital issuance of cards in that banks and credit unions must leverage meaningful data to better understand how to best serve their customers and develop and deliver digital-first products. The need for financial institutions to identify trends and recognize the data points necessary to make decisions grows in importance
Data analytics enables financial technology firms to deliver more personalized services and innovative products to traditional or alternative financial institutions. As the number of electronic records grows, financial services must aggressively call on big data analytics to derive business insights, store information, and improve scalability.
Data strategy often revolves around each financial institution’s mission or mandate. Consistently it is about being where the customers want to meet.
Many financial institutions now work in tandem with fintechs to harness the data for intelligent decisions. This has prompted many financial service organizations to disrupt their previous analytic models and gather valuable insights from immense volumes of data assets stored but untapped in their legacy systems.
Banks and credit unions can ensure their customers have a better digital experience by calling on fintechs’ ability to access data to improve customer experiences, personalize and target marketing efforts, and optimize operations. Or to better understand consumer interest in areas such as contactless disbursements, financial wellbeing, personal financial management, budgeting, credit building, debt reduction, savings, spending activities, goal setting, personal loans and mortgages.
The Key to Unlock Data and Fintechs
The growing number of companies entering the financial services space serves as motivation to adopt more innovative and personalized banking services. Fintech companies use data analytics in ways that identify appropriate spending and saving models. Unlike traditional banking institutions, fintech companies focus more on creating tailored financial services, and this is where big data plays a big role.
The vital factor for fintechs is getting to the data. NXTsoft’s extensive data library can help fintech developers set up their system or embed their technology with a new bank or credit union customer, no matter which core they utilize. Going to market without an independent API integration partner, means that a potential customer must go back to their core provider to connect to needed fintech solutions. Not only do many core providers have competing products, but they also are extremely slow at developing API connectivity (6-12 months) and can be very expensive.
NXTsoft’s OmniConnect Platform is a premier open banking marketplace for all API needs. OmniConnect utilizes cutting-edge cloud technology to connect fintech solutions to banks and credit unions, ensuring that its clients have the most secure and reliable integration environment in the industry. It connects everything from digital banking to item processing and financial systems. OmniConnect delivers the access needed to financial institutions, removing integration roadblocks and providing a seamless connection between a solution and a financial institution’s core processing systems.
NXTsoft also provides a talented team who has been a part of the fintech and security industries for over 25 years. NXTsoft’s solutions help fintechs and financial institutions, connect and optimize their data to maximize revenue opportunities, enhance profitability, and mitigate cybersecurity risk. Many financial institutions, enterprise and government entities struggle to manage data loads, networks and data security. NXTsoft provides solutions to address those needs in the key areas of data connectivity, data security and data optimization.