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Accelerating digital transformation in banking! The future of financial data utilization envisioned by customer data and open data

  • Data Utilization
K. F
​3 minutes to read

In today's world, where digital technology is evolving at a remarkable pace, the use of data in the financial industry, and particularly in banks, is key to improving the value they provide to customers and strengthening their competitiveness. The question is how to utilize diverse financial data to promote DX (digital transformation), which goes beyond simply improving operational efficiency to deepen customer understanding and create new services.
In this column, we will delve deeper into what kind of data utilization is possible by effectively combining the internal data held by banks with external open data, as well as the key points and challenges to achieving this.

Valuable "bank customer data" lying dormant within banks

Let's start by understanding the strength of the internal data that banks possess. This includes a wide range of banking data, such as customer transaction history, account information, loan repayment status, and financial and business information submitted by companies. This is reliable primary information accumulated over many years of customer relationships. By analyzing this customer data in detail, banks can accurately understand the needs and risk characteristics of each individual customer, allowing them to propose personalized financial products and provide more appropriate credit.

Diverse "open data" that captures the external environment

However, internal data alone cannot fully capture the external environment, such as a company's potential, overall market trends, or regional economic trends. This is where open data made public by governments, local governments, research institutions, and others becomes important. Open data covers an extremely wide range of information, from weather information and economic statistics to geographical information, demographic data, and even corporate information. Combining this data with bank data makes it possible to build a 360-degree view of customers and markets, enabling more diversified and deeper insights.

▼I want to know more about open data
⇒ Open data | Glossary

New value created by data fusion

So how can this financial data be used?

1.  Enhanced credit decisions and business feasibility assessments: By taking into account risk factors based on industry trends, regional economic statistics, and weather data in addition to a company's financial data, the accuracy of credit decisions will be dramatically improved. Particularly when it comes to credit for small and medium-sized enterprises and startups, open data will be a powerful source of information for "business feasibility assessments," which involve a multifaceted evaluation of a business's future prospects and market potential, rather than just looking at past performance.

2. Strengthening fraud detection and risk management:
When detecting abnormal transaction patterns in real time using AI (artificial intelligence) and machine learning models, accuracy can be further improved by utilizing not only internal transaction data but also open data such as crime statistics and local economic indicators. This makes it possible to quickly identify suspicious transactions and prevent fraud, thereby contributing to the protection of customer assets.

Key points and challenges for promoting data utilization

There are several important points and challenges to overcome in order to fully promote the utilization of this data.

First, it is essential to have an appropriate infrastructure for collecting, integrating, and analyzing data. A "Data Integration" system that securely and efficiently links various types of data is the foundation for utilizing various types of data as practical financial data.

Next, ensuring data quality and establishing data governance are key. Ensuring data consistency, accuracy, and freshness is crucial to ensuring the reliability of analysis results. Establishing a strict data governance system, including data access permissions, usage rules, and thorough privacy protection, is also an essential step in gaining customer trust. Compliance with regulations such as GDPR and Japan's Personal Information Protection Act is a given, but ensuring data transparency and obtaining customer consent before using data is also essential.

Furthermore, it is essential to develop specialists who can analyze data and foster a culture of cross-departmental data sharing. The success of data utilization depends not only on the technical aspects, but also on changing the mindset of the entire organization.

Data-driven DX paves the way for the future of the financial industry

If banks can fully utilize the power of this financial data, they can significantly increase the value they provide to customers and establish a competitive advantage in the market. Utilizing customer data in banks will not only improve operations, but will also create new revenue sources, build stronger customer engagement, and contribute to a safer financial system for society as a whole.

Advances in AI and data analysis technologies are limitlessly expanding the possibilities for data utilization in the financial industry. Utilizing these technologies and ensuring thorough data governance to secure customer trust is the digital transformation that banks should strive for, and will be the most important point in achieving sustainable growth.

The person who wrote the article

Affiliation: Data Integration Consulting Department, Solution Architect

K. F

In his previous job, he worked in sales and in-house system engineering at a financial institution. After joining Saison Technology, he worked as a pre-sales representative, supporting proposals and planning services related to data integration platform, while also promoting data utilization methods in the financial field. His hobbies are watching baseball games, visiting hot springs, and watching movies.
(Affiliations are as of the time of publication)

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