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Shaping the future of finance

Banks need to become Lords of Data

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I have a range of technologies I use, but get frustrated with them all. My Apple Watch is redundant, as is my Microsoft Surface, and I upgrade laptop and desktop every 18 months or so, largely to keep up with the demand for speed and reliability.  It could be that it’s because I’m not an IT technical support person that I do this, but it’s getting easier and easier to just up sticks and change platforms in recent years thanks to the cloud.

I use Microsoft OneDrive, Google Gmail, Apple iCloud, Dropbox and more to backup and keep photos, memories, key documents and more.  As a consumer, this has come naturally and it pretty much means that as long as I can connect to a network, I can get access to my digital world.  However, just in case, I also keep a physical world.  I have several Terabyte portable USB drives to back up everything and carry in my case.  Just in case.

So everything is replicated, backed up, available, anywhere, anytime, anyhow. What’s the point of blogging about it?

Because I was having that conversation again yesterday: “banks aren’t good with data, are they?”  It was in the context of data analytics being a big conversation of 2015, and continuing that conversation in 2016.   The fact is no, banks are not good with data.  When a technologist talks about a single view of the customer, most bankers with any years in the bank laugh.  A single view of the customer is about as likely as Donald Trump having a sex change, they say (mind you after Caitlyn Jenner, you never know).

They just don’t believe it’s possible.  Maybe it isn’t, but it’s sure as hell worth a try isn’t it?  This is because there are some clever companies out there doing amazing things with data.  For example, I googled “Vanity Fair” to find that link to Caitlyn Jenner.  The next search I enter on Google has already pre-filled “Caitlyn Jenner” after realising that this was the last link I clicked.  Similarly, Google recently gave me a whole list of things related to high blood pressure, after I searched this term the other day, from doctors and blood pressure kits to exercise regimes and healthy lifestyles based upon the digital footprint I had created.

Amazon does the same, but goes further.  For example, I love the fact that Amazon gives me access to Prime for Instant Movies and more, but the real killer app is the Amazon Music Player.  If you’re not familiar with it, Amazon Music Player makes every music order you’ve ever made on Amazon’s website since you joined it available through the cloud.  For me, that’s fifteen years of music and, to illustrate its power, my most recent music purchase was Blackstar by David Bowie (ordered well before his death, as I’m a HUGE fan and have been in deep mourning since Monday’s news of his death).  I hadn’t had time to burn the CD into iTunes and transfer to my phone yet but, driving back from a meeting yesterday, had good enough 3G to play the whole album through my in-car USB link on the drive home.  Fantastic, and a great album too by the way (not just saying that ‘cos I’m a fan).

The secret to Amazon and Google, and Facebook and Apple, is being clever with the data.  Predictive data analytics is their foundation for an augmented lifestyle that will lead in the near future to full artificial intelligence.  My future is one, I believe, where I don’t think about payments and banking.  It just takes place around me, as I’ve delegated it to my digital identity.  My digital identity has a raft of affiliated and certified devices – car, home, kitchen units, refrigerator, television, clothes, shoes, walls, heating and more – all actively transacting and transmitting on my behalf.  These devices authorise and acquire the things I need, and my only notification is when something looks wrong and needs approval or when there’s a lack of sufficient funds.

The companies who can intelligently mine the data of my things – as this is the internet of things – and provide predictive analytics to make my things work better for me, will be my financial interfaces of the near future.  Those financial interfaces are most likely to be aggregated data services integrated into my Google, Amazon, Facebook and Apple (GAFA) world.  I am 100% certain that GAFA, Alibaba, Tencent and more are focused upon how to maximise their data footprint, and that includes the footprint of finance on the internet.

So the banks that aren’t good with data better pull their finger out if they want to be a part of the GAFA ecosystem of finance in the internet of things.

I could go on – this could and probably will be a very long chapter in my next book – but, for now, will just back to the basics of banking:

  1. We don’t outsource core activities like payments
  2. We don’t trust the cloud
  3. We know we have legacy but we can build on that and add
  4. We cannot replace core systems
  5. We do not believe in a single view of the customer
  6. Our data needs to be ring-fenced because that’s how we’re structured

… and so and so forth.

Data digital flow

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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