The world’s most valuable resource is no longer oil, but data. Since ‘The Economist’ published this ground-breaking truth in 2017, “Data, as the new oil,” has become a common refrain in business circles. But far from becoming a cliché, the weight of this statement is so heavy and profound that companies are taking heed.
With AI and ML making forays into several industries, we are coming to terms with making decisions based on petabytes of data.
Single-handedly, the data revolution has revamped the way in which most businesses today operate. It forms the backbone for customer-led innovation, business policies and practices, and even new product and service offerings.
For instance, companies like Amazon and Netflix that utilise customer data to provide customised user experiences have proven to be unstoppable.
In the financial services industry too, data plays a pivotal role in initiating positive changes across the board. Over the past few years, we’ve welcomed the emergence of challenger banks and mobile payment solutions that rely heavily on data.
Most notably, the far-encompassing definition of fintech, as a term that refers to the innovation that aims to improve and automate the delivery and use of traditional financial services, is now an everyday term that even the layperson can relate to.
Clearly, in this data-inundated marketplace, an organization’s winning edge will depend largely on how it is able to control its data. However, data supremacy is only one side of the coin. Equally important is its oft-overlooked flip side.
Consumer trust, the flip side of data overload
A recent study by the World Economic Forum and the University of Cambridgefound that “trust and user adoption” of the latest technologies, such as AI, seemed to be the topmost hurdle faced by the financial industry today. Though technological improvements are indeed viewed positively, trust and buy-in from current and future customers will emerge as a key differentiator in the days to come.
The world’s most valuable resource is no longer oil, but data. Since ‘The Economist’ published this ground-breaking truth in 2017, “Data, as the new oil,” has become a common refrain in business circles. But far from becoming a cliché, the weight of this statement is so heavy and profound that companies are taking heed.
With AI and ML making forays into several industries, we are coming to terms with making decisions based on petabytes of data.
Single-handedly, the data revolution has revamped the way in which most businesses today operate. It forms the backbone for customer-led innovation, business policies and practices, and even new product and service offerings.
For instance, companies like Amazon and Netflix that utilise customer data to provide customised user experiences have proven to be unstoppable.
In the financial services industry too, data plays a pivotal role in initiating positive changes across the board. Over the past few years, we’ve welcomed the emergence of challenger banks and mobile payment solutions that rely heavily on data.
Most notably, the far-encompassing definition of fintech, as a term that refers to the innovation that aims to improve and automate the delivery and use of traditional financial services, is now an everyday term that even the layperson can relate to.
Clearly, in this data-inundated marketplace, an organization’s winning edge will depend largely on how it is able to control its data. However, data supremacy is only one side of the coin. Equally important is its oft-overlooked flip side.
Consumer trust, the flip side of data overload
A recent study by the World Economic Forum and the University of Cambridgefound that “trust and user adoption” of the latest technologies, such as AI, seemed to be the topmost hurdle faced by the financial industry today. Though technological improvements are indeed viewed positively, trust and buy-in from current and future customers will emerge as a key differentiator in the days to come.
Fintech players must ensure that their offerings take heed of both the financial institutions’ need for data and the customers’ concerns for privacy. In May 2018, an EU regulation around data protection and privacy—the General Data Protection Regulation (GDPR)—came into effect.
Japan’s Act on the Protection of Personal Information and California’s Consumer Privacy Act also steps in the right direction. All these regulations ensure that data regulators protect personal data and establish data privacy standards for their businesses across the globe.
Above all, it puts the power back into the hands of the consumer—ensuring they have the right to demand how their personal data is being used and requesting companies to delete it if required.
Though the Fintech industry is well-equipped with technologies, communicating this message to customers and winning their trust will need to be prioritised.
If businesses can showcase their ongoing effort to keep stakeholders constantly updated, we can reduce indirect costs and more importantly, build a community of trust that will propel the industry to greater heights.
Source: e27
