In a rapidly transforming world where businesses struggle to increase digitalisation, financial services institutions are beginning to rethink IT investment decisions, bringing an increased focus on personalised offers and automating internal processes. This can be powered by data sharing.
Through analysing data shared within different organisations, businesses are at an advantage to make informed decisions, enhance external and internal collaborations, and deliver improved financial services to customers. Data optimisation drives innovation and enables business agility and continuity. It provides customer insights that allows organsations to better cater to their consumers’ needs and to improve their overall experience with the brand.
According to the Organisation for Economic Co-operation and Development (OECD), data access and sharing can generate social and economic benefits worth 1% to 2.5% of gross domestic product (GDP). This amounts to up to S$12.3B in Singapore.
Data generated by organisations today is already vast, yet it is still exponentially growing. Organisations’ eagerness for this data to create actionable insights to develop new revenue streams and gain a competitive advantage has led to a growing demand for enhanced data sharing across industries. It has become increasingly critical to maintain business continuity and growth.
However, like all other facets of technology, data sharing is not without its challenges. In many organsations, the traditional way of sharing data internally can be complex and inefficient. Data is often siloed in many different databases, making it difficult for employees to use the data they need to analyse in making decisions as there is no single source of truth. Other common issues include security and the downtime due to extract, transform, load (ETL), the process of extracting data from different sources, transforming them into analysis-ready data, and loading them into the system.
To guide banks in maximising the capabilities of data sharing, the Association of Banks in Singapore (ABS) recently published the Data Sharing Handbook. It promotes a standardised approach to the sharing of data among institutions to ensure compliance with national laws and regulations. Data sharing is founded on trust and security. As such, the handbook encourages banks and non-bank data ecosystem partners to employ safe and responsible data sharing in the country.
The Monetary Authority of Singapore (MAS), meanwhile, has developed the Singapore Financial Data Exchange (SGFinDex) to help Singaporeans consolidate their financial information for a more organised view of their financial portfolio for more effective financial planning and decisions. The platform ensures secure data sharing with user consent to help them access their financial information across different financial institutions.
Data sharing enables innovation in the financial services industry
The data sharing handbook has identified three main benefits of data sharing. Firstly, it broadens an organisation’s data pool as their existing data can be supplemented and broadened by third-party data. Insights gathered from this shared data can be used to enhance products and services and improve decision-making.
Data sharing can also accelerate data value creation, where users are able to democratise, aanalyse, and execute data insights. It enables convenient inter-firm sharing, which helps users to create data value from other organisations within conglomerates, allowing them to develop new revenue streams.
Finally, according to the handbook, data sharing de-risks business operations as it helps employ risk controls. With the shared data, financial institutions can generate efficiencies and foresee and prevent risks, including money laundering, fraud, and other financial crimes.
The most common data sharing use cases in the financial industry are in retail and bank insurers, where customer data is shared and utilised to generate better customer information; investment and wealth management providers, which strengthens investment decisions through analysing market data; and financial data providers, where customer and investment data are shared to help organisations nurture customer relationships.
Furthermore, data sharing enables these financial services organisations to analyse data from partner vendors, even the ones outside the industry, to better gauge the market and understand economic and societal conditions that they can leverage to improve their offerings and establish consumer trust.
Implementing efficient data sharing in the financial services industry
As organisations continue to broaden data-sharing initiatives, it becomes more regulated and challenging. While data services tools and platforms rapidly evolve as more and more companies leverage them, cybersecurity risks are becoming more prevalent, and privacy regulation requirements are becoming more stringent. Given this and the sensitivity of data governed within the financial services industry, there is a crucial need to implement secure and responsible sharing across multiple financial services providers and their partners.
To implement efficient data sharing across business ecosystems and beyond, many financial companies opt to utilise data-sharing technologies via cloud data platforms, which allows them to share live data with several parties. For example, insurance adjusters are given immediate and direct access to third-party data and services to allow them to inspect property or individuals and to determine the coverage of insurance liability.
With multi-party governance controls and revocable access, a cloud data platform eliminates complexity while ensuring seamless and secure sharing and governance control. Companies can view who has access to what data and ensure all business units and business partners access a single and secure copy of data. They can easily access live, ready-to-query data from across organisations; control secure, governed access to shared data; and easily publish data sets for discovery and control access.
Cloud technology can enable easy collaboration across the entire business ecosystem, encouraging data sharing across departments and business units, partners, suppliers, and even customers. It offers a secure environment for financial institutions to collaboratively analyse datasets together with different companies or business units. Since the data is in the cloud and is easily accessible to multiple users, it also removes the need for ETL and breaks down internal data silos.
Financial institutions can achieve a single source of up-to-date shareable data when they adopt a centralised cloud platform. It not only increases efficiency and security but also reduces operational costs and refines user experiences as companies gather new business insights that will lead to the improvement of products and services. This helps companies to streamline their business operations and ultimately accelerates revenue growth in a convenient and timely manner.
The rise of data sharing in the financial services industry paves the way for an elevated customer experience as it yields a more customer-centric approach to offering products and services. It must be thoroughly promoted within the industry, and financial institutions must take advantage of cloud data platforms. Together with regulatory bodies and the business ecosystem as a whole, they must harness the best practices for internal and external sharing. After all, data sharing only reaches its maximum potential and serves its true purpose when it is secure and efficient.
