Legacy platforms will not hold incumbent banks back as the industry becomes more focused on big data possibilities, according to Dan Bolland, director of banking at KPMG.
“I understand what they are saying but the reality is, in Ireland there are really two big players, in the UK there are five big players. So, they have so much data of significance that you can start to look at the data in so many different ways. I don’t know how you win without being one [incumbent bank] almost,” said Bolland, speaking at an industry event in London this week.
“As successful - I don’t mean this in anyway - but as successful as Metro are, once you start to slice their data up two or three different dimensions, you are going to lose that which is of significance. And actually your brand is holding quite a focus group of population whereas if you are at Lloyds you’ve got every type of population, you can slice as many times as you want because you have 20% of UK banking.”
Robert Mulhall, managing director of retail and commercial banking Ireland, at Allied Irish Bank added: “The incumbents, if they can get their act together have strategic advantage.”
Everyone is beginning to recognise that data is essential to every business and is probably the only differentiating factor in most industries, specifically in banking, according to Mulhall.
“Every service product that a bank can produce is completely replicable… The only thing you can provide from a differentiator perspective to your customer is how you know them,” said Mulhall.
In response to Bolland’s remarks, Chris Wilkinson, head of digital strategy at Metro Bank said that people have missed the challenges that comes with refining data to uncover its true value.
“Just to respond to the drowning in data point, and to the point, you made earlier Dan, about it being about the size of the data set. I challenge that initial bit. I think the cliche analogy we hear all the time about data being the new oil, yawn,” said Wilkinson.
“It’s actually a better analogy when you think about it in terms of oil as being quite hard to get to. It’s in hard to discover places, that you need a lot of expertise, and that is a lot of money, to drill it out of these inconvenient places. Then you need to ship it to shore, then you need to refine it, then you need to stick it into an engine and set it on fire. Only then do you get value from it. I think that is often missed when talking about data.”
Serious data value is being overlooked by banks from the customers who don’t complete the onboarding process, according to Bolland.
“On a side note, having done a bunch of data work with banks, a slight tip is ...please, please, please store the data on the people who say no to your deals. The amount of people that I go into and they ask, ‘How are we going to get better’ and I say right let’s have all the data on the people who rejected the deal, and they respond, ‘no, we don’t do that.’”
“Sorry? All the people who clicked on the website, who looked at it, they half filled out the form, we gave them a number, then they went off, and you don’t have any data on that? And they repond, ‘We do but then we delete it.’”
Tony Crane, customer experience director at Bank of Ireland, ended the discussion with a warning that banks will not always have the level of access to customer’s data they currently have.
“There is a real challenge in that - that our assumption that consumers are all going always going to be willing to give us access to data perpetually, it is actually one that is unproven,”
“If we don’t get this value exchange right between the more you give us the more you get back. If we don’t get that right, then all of this is largely irrelevant.”