Temenos on data’s ‘fundamental’ role in banking

Transcript

With regulatory changes and concerns abounding the banking sector, companies are facing imminent pressure to change with the times. One company that is helping others to adapt is Temenos, a banking software systems provider. World Finance speaks to Product Director of the firm’s Business Intelligence unit to find out more.

World Finance: Now Todd as I mentioned, banks are inundated with all of these pressures. How important is data to their overall priorities?

Todd Winship: Well firstly we see banks actually making data a priority, and some people are saying it is the new oil of this generation. But like oil, you need to mine and refine that data to get value. And data is fundamental to a lot of the solutions that our customers are asking us to build.

Two main solutions there, are risk management and customer analytics. So from a risk management stand point, banks across the world are required to be regulatory compliant, they have Basel II and Basel III compliance requirements. And to me that is fundamentally a data issue. So they need the right solutions to be able to extract, cleanse and standardise that data to feed their risk solutions.

[S]ome people are saying [data] is the new oil of this generation

Once that’s complete they can further leverage that data for internal analytics, to further manage risk and to increase bank profitability.

World Finance: So Todd, tell me about some of the challenges that banks face in leveraging their data into a value added entity.

Todd Winship: Well first of all, data without business intelligence and analytics is just data; it has limited value. So fundamentally banks have a problem at the platform level in terms of dealing with that data. And I’ll use some big data terms, in terms of framing those challenges.

The first one is volume. So the data is moving from terabytes to petabytes. Data in the world is doubling, and financial companies are responsible for about 25 percent of that growth. So they need the right solutions in terms of being able to store that volume of data in a cost effective manner.

The next platform problem or challenge is variety. Most banks have hundreds of different data sources across a number of different platforms. So they need to be able to extract, consolidate, transform and standardise that data, so that it has consistent definition and consistent – what we call – mastered data, across the enterprise.

The last one is velocity. From a velocity stand point, we are seeing data move from a batch perspective to real time. So that opens a whole new opportunity for new types of solutions and new capabilities using this real time data.

World Finance: So tell me about some of the other key trends that are taking place in the retail-banking sector.

Todd Winship: The first one is around mobile business intelligence, and the research is very compelling around the use of mobile business intelligence (BI). It’s actually telling us that decisions are made six times faster using mobile BI. And if you consider that it’s your c-level executives, your senior management and your board that’s typically using those solutions; that’s game changing, given the ability to make decisions six times faster.

Data in the world is doubling, and financial companies are responsible for about 25 percent of that growth

What’s also interesting is we see mobile BI driving adoption across the entire enterprise, up to 27 percent. It’s our view that everyone who works in a bank is both a knowledge worker and a decision maker; so giving them that analytical capability to make decisions faster and more accurately, is definitely game changing and should increase bank profitability significantly.

World Finance: Finally, can you tell me about some of the other factors that contribute to a bank’s success in the digital era?

Todd Winship: I think that you’ll see banks adopt BI analytics as a key capability across the entire enterprise. We see a trend in moving analytics right to the front line. I’m personally excited about what we call the ‘analytical bank’ where daily banking processes are enhanced with data and analytics.

An example of this is enhancing the customer experience through deeper understanding of customer behaviours and trends. At our community forum in May of 2014 we demonstrated how a customer’s segment, which is derived from our Insight BI solution, could change the entire experience.

For instance, a Gold customer, when logging into their bank, would be presented with a particular look and feel and set of banking features and functions specific for a Gold customer. If that customer was a platinum customer, they would be presented with an extended set of features and functions, as well as a totally different look and feel. And this also includes tailored product and pricing. So it is very very tailored from a customer perspective to exactly their needs. Banks need to harness this data to leverage that in all areas; including becoming more customer-centric.

World Finance: Todd, thank you so much.

Todd Winship: Thanks for having me.