The window is closing for banks to leverage their data to get ahead in digital services, says new report from Predictive Analytics Working Group
Banks and financial institutions that are not yet engaged with Predictive Analytics need to begin their journey today if they are to maintain future competitiveness in digital services. This is the view expressed by the Predictive Analytics Working Group at Mobey Forum in its inaugural report entitled ‘Predictive Analytics in the Financial Industry – The Art of What, How and Why’.
“Banks have great data but if they want to compete in the digital age they need to get more strategic and more professional about how they use it,” comments Amir Tabakovic from BigML and Co-Chair of the Predictive Analytics Working Group, Mobey Forum. “The PSD2 regulation will soon force banks to provide access to account data through third party APIs. This means that if the banks don’t leverage their data soon, someone else will! The huge influx of new, specialist, data-centric players in digital financial services also means that the field is already becoming common place amongst the ‘new breed’; new services underpinned by predictive analytics are enabling the next generation service providers to extend their lead.”
“The competitive threat is not only from the new disruptors,” adds Kasper Sylvest from Danske Bank and Co-Chair of the Predictive Analytics Working Group. “Many innovative banks are already on board with predictive analytics. Their next step will be to use the new insights and forecasts generated to enhance the digital banking experience of customers with better service design and the creation of new and differentiated value. Banks without a data-driven strategy are now taking serious risks with their future; disintermediation is in full flow and data analytics underpins it all.”
The new report from Mobey Forum, the global industry association empowering banks and other financial institutions to lead in the future of digital financial services, explores the most important components, challenges and key application areas in the predictive analytics field.
The report contends that financial institutions should ‘think big, start small but start now’ and work on building a digital services infrastructure with data analysis at the centre, which can be leveraged to support the whole business over the long term.
“The threat is real, but there is also huge opportunity for banks in this field,” adds Sirpa Nordlund, Executive Director, Mobey Forum. “From now on, it’s all about the data. With predictive analytics banks can not only generate a 360 degree view of their customers’ financial behaviour, they can anticipate their needs and create highly personalised services that surprise and delight them too, cementing their relationships for the long term. Banks can establish greater relevance and appeal, increase trust and ultimately create a more stable commercial and operational footing in the digital age.
“Obviously this is a huge topic. This report is the first in a series and establishes some of the basics. We look forward to issuing further reports as the group continues its analysis.”
‘Predictive Analytics in the Financial Industry – The Art of What, How and Why’ will be of interest to banks and other financial institutions, together with mobile payments and technology developers serving the financial services industry. The report can be downloaded free of charge from the Mobey Forum website.