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Why financial services can improve on intraday data for decision making

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Tim FitzGerald, EMEA financial services manager, InterSystems

 

With financial volatility threatening to escalate at a moment’s notice, fuelled by inflation, war, political uncertainty, and rising interest rates, financial services firms need to keep on top of their game to maintain a competitive advantage. Staying agile in this complex environment requires getting access to data faster than ever, so that financial leaders can make fast and accurate decisions before the rest of the market catches up.

But data latency is a real issue, and making decisions from stale data can mean that the company’s strategy is continually being left one step behind. This is dangerous in normal conditions, and acutely so in periods of extreme uncertainty, when fluctuating risk exposure can undermine the high-value services provided to customers.

In fact, research undertaken by InterSystems shows that over a third (35%) of European financial services organisations aren’t basing critical business decisions on real-time data, with just 8% of firms using data that is less than an hour old to make decisions. Given the inflexibility imposed by this reliance on intraday numbers, better solutions to managing, distributing, and deriving data, that provide real-time outputs, are necessary.

The data challenges for financial services firms

The survey, involving almost 200 senior line of business leaders within European financial services firms, found the biggest data challenges being faced include delayed access to data (39%) and not being able to get the data in the correct format (33%) or from all the needed sources (31%).

Tim FitzGerald

As a result of this, the overwhelming majority (92%) of European financial services firms are forced to rely on data that is over an hour old, with 85% relying on data that is 24 hours or more old. Consequently, 35% of senior leaders said that they were unable to base decisions on real-time information and therefore were being forced to make assumptions that could well be out of date by the time they were made.

There are many reasons for data being delivered slowly across an enterprise, but the most common root cause is found in disparate legacy systems and applications that weren’t originally designed with the rest of the organisation in mind. As legacy systems age, and new ones are introduced, pressure builds up that eventually overflows to the IT department, where data-provisioning requests are stuck in huge backlogs. InterSystems research shows the forty-three percent of respondents also claimed they have anywhere between 25 and 100 data and application silos, adding even more complexity to the overall flow of data and slowing down access to the information required.

But the use of intraday numbers, which can be up to eight hours old, no longer has a place in financial services. Instead, firms must now feed their frontline teams with real-time data that tracks events moment by moment to ensure they are able to respond to market changes and customer demands as they happen.

But delivering actionable data in real-time only solves part of the problem. Firms within the financial services sector must also go further and equip their professionals with the data and analytics capabilities to predict what could happen next, through performing analytics on fast-moving transactional data, and provisioning access to those who need it.

The smart fabric architecture

One solution that that address this problem uses an innovative architectural approach, the smart data fabric, which accesses and harmonises data from existing systems and silos inside and outside the organisation. It generates results on demand, which ensures that the information is both current and accurate. The smart data fabric has the ability to perform analytics on real-time event and transactional data without impacting the performance of the transactional system, so demand for data doesn’t impact the system being queried. This means firms can move away from using information stored offline or elsewhere and equip themselves with real-time insights to drive their businesses forwards.

A smart data fabric architecture removes business latency and embeds agility by decoupling the reliance on old data derived via legacy methods. It achieves this by accessing, transforming, and harmonising data from multiple sources, on demand, to make it usable and actionable for a wide variety of initiatives. It allows existing legacy applications and data to remain in place, ensuring one source of truth, and reducing architectural complexity. The ability to bridge silos from multiple sources, and from disparate locations, allows employees to access, query, and manipulate this data to deliver informed decision-making across the enterprise.

It also eliminates delays in accessing data and allows organisations to incorporate analytics on real time event and transactional data without impacting system performance. This is due to its distributed nature and helps to eliminate errors and missed business opportunities. Allied to the enhanced flow of information, AI and ML can be utilised across the fabric to augment the decision-making process, delivering predictive and prescriptive suggestions while enabling programmatic decision-making when the use case warrants it.

The smart data fabric architecture addresses the challenges facing financial services companies, enabling real-time data to flow throughout the organisation without disrupting the operations of legacy systems. This capability meets the demands of financial services firms that require on-demand data to secure their success. By adopting this new approach to faster data, business leaders within financial services can transform their view of the enterprise, allowing them to make better decisions, from the freshest and most accurate data possible.

Banking

Emerging technology will power long-term sustainability within the UK banking industry 

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By Peter-Jan Van De Venn, VP Global Digital Banking at Hexaware Mobiquity.

 

Sustainability has been a big focus for the banking industry in recent years, with the issue becoming increasingly important for consumers. It’s no wonder that sustainability has become baked into the purposes of almost every bank, from Natwest to HSBC.

However, the economic uncertainty of the last year has led to many banks putting it on the back burner. Challenging market conditions have forced financial institutions to change their priorities to concentrate on protecting the bottom line. Our research found there’s been a significant drop in the number of UK banks saying that sustainability remains a key business strategy. 12 months ago it was a major priority for 100 per cent of banks, but now that number has shrunk to 60 percent.

Whilst it’s understandable that banks are feeling the pressure at the moment, there’s a risk that they will miss out if they hit the pause button. From cost savings brought by innovative digital products and services, to improved brand reputation and increased profitability, there are a lot of longer-term benefits they could be failing to unlock. So how can they keep moving forward?

Losing momentum

Emerging technology holds the key to their success, with the power to disrupt current behaviours and promote a more sustainable culture. Banks are already aware of this, with 76 percent using digital transformation to drive sustainability, but a lack of leadership has made it difficult to build momentum in the last 12 months. Currently just over half (54 percent) of banks have tasked an executive at board level with overseeing sustainability – way down from 83% just 12 months ago.

This lack of board authority means banks are struggling to engage the entire organisation to move ahead with sustainable initiatives. As a result, almost two-thirds of banks are seeing progress slow, admitting they are not actively taking steps to foster more sustainable behaviours throughout the organisation. Those that have taken their foot off the gas need to find a way to move forward again.

No time for standing still

Banks know that technology can drive sustainable behaviour. For instance, many of them are already encouraging their workforce to work remotely, as a way of reducing travel. This has two benefits – not only does it cut the costs of running physical offices at full capacity, but also reduces the bank’s carbon footprint. There has never been a better time to invest in technology to drive more sustainable behaviours.

New digital products and services can also extend the benefits beyond employees to encompass the wider customer base. A fair number of banks are already investing to make this happen. More than a third (35 percent) of banking organisations are using Machine Learning (ML), Artificial Intelligence (AI), cloud and analytics to make digital services more easily accessible. Investment in these technologies will be critical as the number of physical bank branches continues to decrease, with figures from Which? showing this is taking place at a rate of 54 branch closures each month.

Hitting environmental and social responsibility goals

Emerging technologies can also help banks keep pace with tightening ESG rules and regulations. Banks are faced with demands for increasingly granular reporting and transparency on ESG – demanding a new approach. In line, 41% of them are developing data visualisation tools to improve stakeholder engagement and understanding of ESG risks and opportunities, while 37% are using machine learning and artificial intelligence to identify and track ESG risks and opportunities across a wide range of data sources.

More than one in three are also using the blockchain to improve transparency and traceability in supply chains, and implementing digital tools and platforms to collect, analyse, and report ESG data and metrics in a standardised and consistent manner. All these applications of emerging technology will put banks on track to address global environmental challenges and unlock a greener future.

Long-term sustainability

As the economic pressures hopefully start to subside, increasing numbers of banks will start investigating how they can use emerging technologies to provide engaging experiences and value-added services for customers, to drive greater revenue and efficiencies.

Whilst banks are right to focus on their revenue under difficult trading conditions, it’s important they don’t miss out on the long-term benefits that sustainability can bring. To capitalise on this, banks must keep pushing the boundaries and invest in emerging innovations to drive more sustainable banking behaviours, benefiting the planet and driving great digital experiences for customers.

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Banking

The Future of Banking: Streamlined Cash Management for ATMs

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Gaetano Ziri, Innovation Manager, Auriga

 

“Maintaining free access to cash for the community demands robust strategies to mitigate the escalating costs incurred by banks and ATM operators in handling cash. A pivotal step in this direction is modernising cash management systems to foster efficiency and reduce operational costs.

Back in 2018, a report by McKinsey underscored the urgent need to overhaul the largely manual and disjointed systems relied upon by nearly half the banks worldwide for forecasting cash requirements at branches and ATMs. Despite the decrease in cash usage noted by the European Central Bank, the cost of managing cash has not abated, primarily due to surging labour costs.

To reconcile the demand for free access to cash with the requisite cost reductions, banks are increasingly turning towards tech-driven solutions in cash management that elevate service levels while driving down expenses.

The Complex Landscape of ATM Network Management

Operating a vast ATM network can be a double-edged sword for banks, simultaneously offering customer convenience and engendering considerable challenges, including substantial cash handling, management, transit and security costs. Each ATM embodies a multifaceted operation involving numerous cash transfer operatives, necessitating a coordinated strategy to forestall costly inefficiencies.

The remedy is a holistic, data-centric approach to streamline the management of intricate ATM networks and counter the escalating costs associated with cash access. The merits of such an approach, grounded in continuous data collection and analysis across ATM networks, encompass:

  • Strategic Planning: Leveraging real-time data to craft bespoke strategies for individual branches or regions, assuring optimal cash flow management and averting superfluous cash loading orders.
  • Operational Transparency: Facilitating stakeholders with instantaneous access to accounting and operational data relating to cash supply chains, thereby enabling timely interventions and adaptations.
  • Enhanced Customer Experience: Minimising ATM downtimes to guarantee uninterrupted cash access to customers, enhancing their banking experience.

Innovations in Cash Management: A Closer Look

So, how does this revolutionary cash management technology function? The answer lies in a series of sophisticated features that employ cutting-edge predictive analytics, automation, and data-driven decision-making:

  • Predictive Analysis: Forward-thinking solutions predict cash necessities of distinct units, offering precise demand and cash flow projections by considering variables such as seasonal fluctuations, holidays, and daily usage trends.
  • Automation and Monitoring: Swapping manual processes or basic mathematical functions with modern software solutions for cash management ushers in real-time monitoring and efficient intervention planning, which can potentially diminish order management costs by a significant margin, whilst improving precision and operational fluidity.
  • Optimised Cash Transit Management: Utilising predictive analytics to strategically plan cash restocks, thereby reducing the likelihood of ATMs depleting their cash reserves and improving customer satisfaction.
  • Data-Driven Decision Making: Availing a comprehensive dashboard to generate timely reports and monitor critical metrics facilitates strategic decision-making grounded in accurate data, substantially reducing residual cash stock in ATMs.

As the financial landscape evolves, banks and financial institutions are impelled to adapt and innovate. Traditional cash management approaches are increasingly becoming outdated, paving the way for modern, data-driven solutions. These not only embody a commitment to technological advancement but also signify a strategic movement towards future readiness.

Embracing such technologies promises streamlined operations, substantial cost reductions, and a superior customer experience, setting a new standard in ATM network management.”

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