Leveraging data in motion for financial services

Attributed to Richard Koh, Area VP, Asia, Confluent | 13 January 2022

Richard Koh

Area VP, Asia, Confluent

Today, CEOs and CTOs all over the globe are locked in a permanent struggle to evolve products and services to match the growing swell and shifting demands of an increasingly informed customer base. Nowhere is this felt more acutely than in Singapore’s financial services sector. As Singapore’s economy has shifted dramatically in the wake of the pandemic, this process has become all the more complex.

With consumers increasingly expecting that all the services they use should be available online, more and more of today’s organisations are turning into software businesses by proxy. In Singapore, 80% of survey respondents noted that they would continue online banking post-pandemic. A traditional bank dabbling in digital services is no competition for existing digital native banks, or those transitioning to provide more services online. Agile FinTech companies offer exemplary customer experiences and streamlined services against which legacy banks, with their extensive overheads and massive corporate infrastructure, cannot compete.

History is littered with examples of organisations that became obsolete because they failed to adapt in time. Often, it is not because they did not see the change coming, but because actually making the changes required is extremely hard – particularly when an organisation is large, complex, and stuck in a legacy mindset.

So how can organisations solve a problem like continuous innovation – and where do they start to align their stakeholders and rally an entire business around potentially massive operational changes?

The importance of data in motion

The good news is that there is an abundance of data sources, not to mention third party information at their disposal that can help shape what needs to happen next. The not so good news is that bringing it all together and actually defining a signal in the noise and eliminating false positives, outliers and other misleading data points is extremely difficult.

The world’s biggest organisations employ hundreds of data engineers and scientists to tackle precisely this problem. But fundamental to decoding it all – and extracting the answers to the questions businesses did not even know needed asking – are integrated systems, and a data infrastructure that is set up to support the business in real time.

Data in motion brings together an organisation’s databases, applications and tools and creates a unified system that provides ubiquitous access to all data stored in real time.

This means that  financial services institutions looking to prevent fraud and keep customers  safe could analyse, detect, and prevent fraud from happening in real time with properly connected applications and data.

For example, Grab, one of Singapore’s largest superapps, leveraged on cloud native services  to detect and prevent fraud. Their technology stack, Grab Defence, was able to capture data from various sources and utilise event driven architecture and gain real time analytics for fraud detection. At the same time, with the option to deploy open source infrastructure across multiple clouds, Grab ensured that they were able to achieve scalability and data isolation for sensitive information, reducing fraud rate to 0.2%. This stands way below the industry average of 1.6% in Southeast Asia.

Customers’ tolerance for poor experiences – or even suffering an instance of fraud – have dropped to near zero. It is too easy for them to find a competitor, move their money to another bank or simply adopt a different service.

Data in motion enables companies to harness data flow across the organisation and react to it continuously. Financial institutions can now constantly revise, improve, tweak, refine and enhance their products, services and customer experience. The hard part is putting those insights into practice.

Access the right talent

It is a cliche, but people are the biggest asset to any company, no matter the field. But they can also become the biggest blockers of innovation if organisations cannot access or train the right talent fast enough.

As more and more organisations become digital software companies, the competition for the best engineers and developers is fierce. Singapore is in the midst of a digital skills gap where businesses have an appetite for change and a wealth of data to help them do it – but are nonetheless stagnating, simply unable to move at the pace they want or need to survive. Since the pandemic, 73% of Singapore businesses have accelerated their pace of digitalisation.

Amazon Web Services also recently estimated from a survey that Singapore’s economy will need an additional 1.2 million digitally skilled workers by 2025. This number is a 55% jump from the current 2.2 million. Up-skilling a team can take anywhere from 6–12 months, at a minimum, at considerable expense to the business. This kind of pause on critical innovation will prove too much for many businesses, who will be left in the dust as other, more agile organisations with continuous development-to-production pipelines power on and forge new paths.

However, there is a short-term solution. Finding the right partner with the necessary skills and capabilities that can help institutions harness their data effectively. The very best partners will even train up internal teams while accelerating transformation efforts, ensuring that each client has the skills  needed to succeed in the long-term.

Align stakeholders and shift thinking

Beyond the skills gap, one of the more common challenges we hear about is convincing key stakeholders of the power of data in motion as a new data architecture.

Questions are asked about maturity, security, and a whole host of other issues around total cost of ownership, tech debt and internal skill requirements. The truth is, data in motion is well-established, pays for itself almost instantly, and offers incredible developer experiences that fuel pioneering, business-focused products based on actionable insights.

From experience, there are two types of C-suite leaders. The first are hungry to innovate, and see no problem as insurmountable. These leaders want to move their organisations away from commodities, and use data to create memorable experiences, better understand their customers, and deliver the right change for their organisations.

The second group of leaders lean towards keeping things as status quo, sticking to legacy investments, mainframes and infrastructures.

Mindset plays a significant role for those in the latter camp – and the quickest way to convince them otherwise is to show them a new reality.

Deliver continuous innovation by harnessing unique data

While access to talent is an industry challenge, moving to a more digital first and agile mindset is not. Data in motion infrastructure allows organisations to make use of the data at their disposal to fuel better decision making, create better, real-time experiences for customers, and create products and services customers need.

Making use of foundational data in motion platforms, businesses will be able to harness the full power of continuously-flowing data to innovate – and win in the modern digital world.