Bahaa Abdul Hussein is a Fintech expert and shares his experiences with his audience through his blogs. He talks about the growing importance of data in this blog.

The growth of online banking and neobanks have led to enhanced customer service. Banks now offer personalization for customers. Data has now become very important and is being used effectively by banks to improve their services.

“Data on home purchase can make a bank offer home insurance to clients. Similarly, when data shows a customer being newly married a first home loan offer can be made. These kinds of personalized services are possible, thanks to the effective use of data.”, said Bahaa Abdul Hussein.

Embedded finance is here

The ultimate goal to meet customer needs is embedded finance. Open banking is becoming popular and with it embedded finance is growing. To be able to capitalize on it, banks need to understand their customers better.

Internal data that is available needs to be used well. This alone is not enough and data enriched by 3rd parties are needed. External data can be obtained from the marketplace and would allow a 360 degree view of the customer. The data game of banks need major changes to be able to handle embedded finance effectively.

Data Optimization

Data is available in plenty, but most organizations don’t know what to do with it. An enterprise level strategy has to be formulated by banks to deal with data. It is vital that the data should be brought together in a meaningful way. Doing so can help offer better services thereby strengthening the relationship with customers.

When data is being optimized, there are risks involved. Increased security and stronger identity and access management is needed. All these will help in making use of powerful initiatives like:

1) Personalization

This allows banks to understand the expectations of customers and deliver accordingly. Personalization ensures customers get better services that are tailor-made to meet their specific needs. In this competitive world, personalization can help banks get a competitive edge in the market.

2) Quantitative research

Data analysis is critical today and quantitative research is the need of the house. This is a specialized area and banks need to make this a part of their workflow. Automated data analysis is becoming popular and helps banks manage this easily.

3) Compliance and regulation

Banks need to follow norms made by regulators. Key metrics need to be reported on time to regulators and this calls for better data handling. An improved mechanism for data sharing between banks and regulators is needed to make this more effective.

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