How can a customer-centric digital platform transform data exchange?

By

Hamish Thomas

EY EMEIA Payments Leader and UK Advisory Banking Technology Leader

Transformation leader in payments and open banking. Passionate about technology’s potential to create opportunity and manage risk. Optimistic runner. Film enthusiast.

3 minute read 15 Feb 2019

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A data exchange platform, built around the customer, can provide a secure and traceable exchange of customer data.

Banks and financial institutions (FIs) have long struggled to get one, clear, consistent view of their customers’ data. And while many have invested in single customer view (SCV) programs and systems, issues around data quality and shareability across the organization remain. But what if putting customers in control of their own data exchange could solve the problem and bring broader benefits?

Fragmented information across the business

Sometimes simple things cause major problems. When customers contact their bank to update their addresses, they expect the change to be communicated to those in charge of their everyday current account, their business loan and corporate credit cards. But despite — or perhaps because of — the proliferation of digital systems, many banks and FIs still struggle to ensure that even the most straightforward changes to customer data are replicated across the business.

Apart from giving customers a poor experience (which may encourage them to switch FIs), the issue is increasing banks’ operational costs, threatening data quality and know-your-customer (KYC) compliance, and leaving them unable to leverage an accurate, unified customer profile to up-sell and cross-sell products effectively.

And, as data protection regulation evolves, an inability to get a firm view of how customer data is protected, managed and shared could cause serious and expensive breaches. Developing a consistent, auditable and robust data exchange process is a critical imperative for every bank and FI today.

A new approach to data exchange

To do this, many organizations have implemented SCV technology systems. But to date, most SCVs have yet to deliver on their promises. These systems are usually expensive, yield only limited-time savings, require specific skill sets to operate, and create yet another data store to be managed. And critically, SCVs are technology-led, with little or no interaction with the customer.

Engaging customers in the collection and sharing of their data builds mutually beneficial engagement with FIs, helping them move beyond complying with regulatory requirements such as General Data Protection Regulation (GDPR) to embrace the real potential of an application programming interface (API) connectivity to build better, more profitable customer relationships.

With this in mind, EY is seeing a growing need for financial institutions to adopt a new customer centric approach to data exchange - a platform that provides a secure and traceable exchange of customer information, controlled by the customer, which can be implemented directly into an organization’s online channel.

The below graphic illustrates how a customer-driven data exchange platform could serve small businesses, such as one owned by Max:

A typical digital passport customer journey

Customer as data controller

The key advantage of a customer-driven data exchange platform like this is that it supports the customer to act as data controller for his or her own personal information, giving permission for the use of that data through a secure, audited digital exchange. From an operational perspective, the platform can act as a router within the FI, facilitating customer-permissioned exchange of data between the multiple sources within the organization (e.g., cross-business line and cross-border).

Data origination and lineage can be tracked and maintained so that insight can be gained into when and where data has been accessed, utilized or modified, and by whom. The solution is then able to hold a metadata map of what data attributes are stored, and where, across the organization. It is therefore able to aggregate and identify data conflicts that can then be presented back to customers for resolution. Data changes can be pushed out to multiple data sources in line with customer permissions, to support the organization in maintaining an accurate customer dataset.

There is an often an overlooked party that could be leveraged to create an accurate single customer view: the customers themselves.

It’s this ability to provide mutual benefits that would drive adoption of a customer-driven data exchange platform - a critical factor in any offering’s success. Open banking connectivity demands new data solutions, while evolving data regulations, require a new approach to data exchange that captures customer consents. With traditional SCVs falling short, a new customer-centric platform may be the answer that meets customer expectations, while addressing traditional pain points for companies. And as competition increases, and open-API connectivity reshapes the financial landscape, a customer-driven data exchange platform may be just what banks and FIs need to maintain compliance, unlock savings and new value, and create the compelling customer experiences that will define future success.

Article contribution by Robyn Easton, EY Digital Passport Product Owner; Mark Torpey, EY Digital Passport Product Manager and Martin Jones, EY Digital Passport Product Director.

Summary

Overlooking the customer’s role in data exchange may be the biggest pitfall of traditional single customer view systems. Customers know their own data best and, if the right incentives are in place, can be motivated to keep records up to date.

About this article

By

Hamish Thomas

EY EMEIA Payments Leader and UK Advisory Banking Technology Leader

Transformation leader in payments and open banking. Passionate about technology’s potential to create opportunity and manage risk. Optimistic runner. Film enthusiast.