Over recent years, some of the hesitancy that once surrounded implementing new technology within financial services firms and banks has begun to dissipate - in part owing to a greater understanding of technology at board level.

However, a lack of understanding of the intended aims and desired results of new technology remains and is leading to a larger number of projects being deemed to have failed or stalled.
In such a competitive industry, where customers are demanding greater personalisation and use of online services, ignoring technological advances isn’t an option.

What does success look like?
Defining what success looks like and how success will be measured ahead of implementing new technology is essential if financial firms are to optimise their use of new technology. This is particularly true of traditional firms who are now regularly coming up against fintechs and digital-only banks, for whom technology is their bread and butter. However, while traditional firms need to be able to compete, the main driver of new technology investments shouldn’t purely be to match or better what other organisations are implementing or offering. This type of knee-jerk reaction often results in misaligned technology implementations that don’t work for the wider business. Instead, it’s essential to look at what is right for their organisation and customers.

Success looks different for every organisation, so needs to be approached with that mindset. For one firm it might be streamlining and enhancing interactions with customers through the use of natural language processing in chatbots. Meanwhile another might judge success by the number of new services it can offer due to the adoption of new technology such as data platforms than can help them make more effective use of their data to deliver those services.

The pay off
In recent years, competition within the financial services industry has been tough and traditional banks especially have felt the effects – with closures of bank branches a regular occurrence on streets across Ireland. Conversely, global fintech investment reached €37 billion in 2020 – an increase of 14% from 2019.

Similarly, digital-only banks like of Revolut and Monzo have gone from strength to strength – so much so that by 2025, more than one in five Irish adults (22%) will have a digital-only bank account. This equates to almost 800,000 people, up from over 530,000 in 2020.

For traditional firms, adopting a more defined and strategic approach to technology investments will not only help them to meet key objectives but it will also help them to better compete against fintechs and digital-only banks in the digital innovation stakes. This is because it will allow them to determine exactly what they want to achieve and invest in technology accordingly to provide customers and prospects with the types of products and services they desire and to streamline their operations.

As firms consider what they want to get from their technology investments and how to gain the most value from them, data fabrics are becoming an increasingly popular choice. This new type of architectural approach offers financial services firms centralised access and a single, unified view of data across their entire enterprise. A data fabric can connect on-demand to the firm’s full range of internal and external data sources, allowing them to leverage this to drive forward new innovations.

This can be taken one step further with the adoption of a smart data fabric which embeds a wide range of analytics capabilities directly within the fabric, making it faster and easier for banks and firms to gain new insights and power intelligent predictive and prescriptive services and applications without the need to move the data.

For traditional banks and institutions, implementing a smart data fabric as part of their overarching technology strategy can give them much-needed agility and the capabilities to introduce new innovations to keep pace with fintechs and digital-only banks.

Customised offerings
A smart data fabric with advanced analytics capabilities that integrates all their various silos and sources of data will allow traditional firms to fully leverage all their data, as well as data from external sources, to understand and gain a 360 degree of their customers. This will allow financial services firms to gain a fuller picture of the customer to deliver highly-customised experiences and options.

Leveraging data to deliver transformative services and rich customer experiences will enable more traditional firms to gain a competitive edge, expand their customer base, improve customer retention, and increase revenue and share of wallet.

Increased agility
Unlike most fintechs, traditional banks have a large volume of rich historical data which can provide immense value if leveraged fully. By empowering these organisations to explore, analyse, and leverage this data freely, a smart data fabric can enable them to be more nimble, innovative, and customer focused. This can help them create or streamline processes, identify adjacent services to deliver and monetise, and even open the door to secure customer access to data via APIs, etc.

Setting firms up for digital innovation
By having clear objectives in mind before implementing new technology and looking at the specific challenges they need to solve, financial services firms will be better placed to make a success of their investments.

Smart data fabrics are one type of innovation that could prove extremely beneficial as they take this approach, allowing them to solve critical problems while also continuing to extract value from their previous technology investments. More broadly speaking, it will provide firms with a solid foundation to innovate and adapt to changing consumer demands, leverage the wealth of data they possess, and gain a competitive edge.