Why Data Integration Matters in Financial Services

2.5 quintillion bytes of data are created each day, and that number is continuously growing. For financial services companies, that presents untapped potential to gain better insights into existing customers, new business opportunities, target market audiences, and the competitive landscape.

At the same time, this flood of data raises significant challenges for financial services companies because so much of it is stored and managed in legacy systems. To add to those challenges, financial services are highly regulated, so companies in this industry must place a high priority on legal and regulatory compliance, as well as data security and fraud detection.

To complicate matters further, there has been a proliferation of different data types in recent years, creating further complexities around data integration. Unstructured data has gained relevance, and geospatial information has gained recognition as a key factor in creating value by adding context to  enterprise data.

The financial services industry is particularly IT-intensive. According to IDG research, 49 percent of financial services companies have more than ten internal or external sources of data that are critical to their business processes. The problem is that all of these systems create data silos that act as a drag on innovation. In an industry that continues to evolve rapidly, that creates a competitive disadvantage.

Key benefits of streamlined data integration in the financial services industry

Fraud detection and compliance

Real-time data integration is especially important for fraud detection and compliance. Streaming data enables organizations to access data as soon as it becomes available, making it possible for financial services companies to identify anomalies as soon they appear. Real-time visibility plus AI and machine learning enable fraud detection teams to pinpoint potential risks before they turn into significant problems.

For many companies, the opportunity to work with up-to-the-minute insights remains untapped because of limited integration between legacy systems and newer investments such as cloud platforms.

Customer insights

Financial services is under pressure to constantly improve upon the experiences they are delivering to their customers, but understanding clients goes far deeper than just meeting regulatory requirements.  Data analytics have come a long way in recent years. As cloud storage has become cheaper and processing power has increased, leading companies have tapped into data to gain insights that can be used to drive competitive advantage.

Unfortunately, most financial services companies are still operating with multiple data silos, making it difficult to get a complete picture of customers. Streaming data in real time can reveal common behaviors and correlations over time, helping organizations to gain insights into the needs of their customers. By leveraging these insights, organizations can begin to create better individually tailored customer experiences.

It’s common, for example, for financial services companies to classify customers as either commercial clients or individual consumers.  In reality, the same individual may fit into both categories.  This is particularly true if an individual is the owner of a small business or serves as a key decision-maker in a larger organization.

Highly structured master customer records do not adequately address this kind of complexity. CRM and marketing automation systems provide greater flexibility around defining and structuring customer data, yet most of the individual systems that contain client information do not integrate with others.

By integrating data across transactional systems, customer relationship management, and digital marketing automation; financial services companies can achieve that 360-degree view to better understand customer needs, avoid losing clients to competitors, and engage customers in new ways.

In Precisely’s 2019 Data Trends Survey, more than two-thirds (68%) of respondents indicated that siloed data negatively impacts their organization in some way. Tight integration with data pipelines helps make enterprise application data accessible and usable. That, in turn, begins to break down the data silos that commonly exist within large environments.

Evolve your business applications

Cloud computing and mobile devices have been the basis for much of the innovation that has occurred in recent years. The financial services industry has kept pace with those changes, offering customers an array of new services built around web technology and mobile phones. Services such as remote deposit, online bill pay, and electronic statements have added value for customers and banks alike.

Much of the integration code for such applications, however, has been built the hard way, with custom one-off projects that consume substantial time and resources. Innovation has happened, but it has been very expensive, and long-term costs of maintaining custom integration may be significant.

Automating and streamlining those integration processes will not only make it easier to extend business applications for new innovation, but it will also enable financial services organizations to more easily evolve existing integration code to lower their total cost of ownership for the long-term.

Companies will inevitably see an increase in the amount of data available to them. As data collection grows over the course of time, that data can be utilized across a range of complex processes to serve the needs of next-generation business applications driven by AI and machine learning.

Data integration: Connecting data, breaking down silos

Precisely’s change data capture solution, Connect, is designed to help businesses stream real-time application data from legacy systems such as mainframes to mission-critical business applications and analytics platforms that demand the most up-to-date information for accurate insights.

Connect provides a reliable transfer of data from legacy systems to business applications, even if connectivity fails on either side. It helps enterprises to keep data in sync in real-time, without overloading networks or negatively impacting the performance of the source database system.

Connect supports both cloud and hybrid architectures through a variety of application topologies that can be combined, including one-way, two-way, bidirectional, consolidated, distributed, and cascade. With Connect real-time data replication software, businesses have the power to build stream and share application data across the enterprise – from mainframes to the cloud – to drive their business forward.

To learn more about how Precisely Connect can help your financial services company achieve better results, gain valuable insights, engage customers, and eliminate data silos, download our e-book Streaming Legacy Data for Real-Time Insights.