This week we would like to share Martin’s thoughts on the use of data by financial organisations today and the opportunities ahead.
How long until financial organisations in Australia use data to its full effect?
It is something organisations have been talking about for a long time and there definitively is a trend for the big organisations however not without its challenges. Corporate cultures and old systems not built from the ground up, to do different things, make it difficult to find a way to get insights out of the data. It is a different way of thinking. Many businesses are still wired to think of products rather than customers. They approach data like a rifle shot to do one narrow thing rather than across numerous products, and from a holistic “customer in” perspective.
There is a big difference between data and insight. We are only just beginning to see the first signs of organisations identifying the difference between the two. Insight is critical and many organisations don’t have the technical skills to translate data and insight
It’s a revolutionary time in financial services.
Over the next two to three years, if you overlay open banking, most of the data that has been hidden will be much more freely accessible to consumers and Fintech organisations, and that stimulates innovation. Open banking will happen within the year, maybe sooner. Moula is already using data differently to offer services to small and medium business customers, for example. NAB has already started unsecured SME loans and here are early signs of how AI and tech smarts are making things quicker – it’s really turning point.
It is all about education, especially for the intermediaries and existing players. There is also the broader industry angle, behaviour in Australia is much more conservative than players in the UK for example. There is an interesting cultural difference. We are more risk adverse.
You can already see many Fintechs turn data in to something useful, analysing data and then tailoring product offers. Starting from the customer not the product. Their systems and tech innovation is built with the customer focus, activated by digital platforms and tailored for the experience. They are switching it around and they will only continue to innovate.
On Personal & Property Finance Insights: Part 4, Martin North will be answering:
How will new available data (incl. CCR) transform the Australian financial market and other trends you should be watching.
About Martin North
Martin North, Digital Finance Analytics founding Principal, data scientist and banking sector analyst is often quoted in the media. He curates the Digital Finance Analytics Blog, which provides commentary on our research programmes as well as covering broader industry issues. Register to get regular updates.
Digital Finance Analytics is a boutique research, analysis and consulting firm providing advisory services to clients in Australia and beyond. Services are delivered virtually using the web, blogs, social media, online conferencing and other digital means. We also produce corporate education and training videos for some of our clients.