Can banks use data to delight customers while ensuring privacy?

MANAGING data in the banking space isn’t easy.

The topic is something bankers, regulators, and consultants constantly debate about as data gives rise to privacy and protection concerns but also creates opportunities to delight customers with convenience and personalization.

For better or for worse, however, banks don’t have a choice but to navigate the waters carefully and find a way to leverage data that customers trust them with to create better products and services, while also protecting that data and ensuring it remains private and secure at all times.

To get a quick grasp of what’s current in the data space in banking, Tech Wire Asia caught up with Standard Chartered’s Chief Data Officer Shameek Kundu ahead of his presentation at Innovfest Unbound.

“As a bank with more than a 160-year old heritage, we are deeply aware of the trust customers place in us by sharing their data, and the responsibility it entails.

“Continuing to respect that trust, particularly in an environment where this is so much more data, from multiple sources, will be critical for banks or any other firms offering financial services.”

Kundu points out that customers don’t share intimate information with strangers they meet on the road. And yet, they appear to be much more willing to do so online!

“Being aware of what data we are sharing, how it can be used, what rights we are granting to that data, how we may be able to revoke them are all important ways in which we as individuals can protect our data.”

The reality is that for most people, including data professionals, this is easier said than done. Nevertheless, efforts have to be made by bankers and regulators alike.

“Banks like Standard Chartered can help by educating customers on ways to protect their data, providing simpler ways for customers to understand their data sharing with the bank, and promoting national and cross-border initiatives to enable safe data-sharing.”

Is IoT going to make the data problem even worse?

Kundu highlights that given the amount of data that banks have, he imagines banks can use it in three ways to make a difference:

• Provide greater convenience and more personalized experiences in day to day banking
• Offer improved ability to obtain loans based on alternative ways of evaluating credit history, and
• Build greater confidence in the bank’s ability to protect its money through better fraud monitoring

“We collect data to support the objectives of serving our existing customers better, providing access to financial services in Asia, Africa and the Middle East, and managing risk by preventing fraud and financial crime. This is of course governed by the relevant regulatory frameworks.”

However, with the rise of IoT devices and consumer wearables, the amount of data that banks gain access to could grow exponentially.

Although some experts believe that IoT will complicate the data privacy and security problem and create new challenges for banks, Kundu is of the opinion that data from wearables and IoT could potentially support the three objectives he’s identified.

“One of the use cases we are exploring is how we can provide better financing options to corporate customers based on IoT data from the movement of their physical assets,” revealed Kundu.

While Standard Chartered is exploring many other use cases involving IoT and exciting technologies such as blockchain, Kundu’s commentary about data and the opportunities it creates just goes to show that banks need to embrace the future and look for new avenues of growth with technology — because the digital future is inevitable and has arrived.

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