Continuing our two-part series, Tom Berger, VP of Financial Services at HSO, and Asad Mahmood, VP of Data & Analytics at HSO, discuss data architecture’s impact on banks. This blog will focus on how mature banks alleviate data exposure risks and the hidden costs of not managing data over time. For the first part of this series, read Increasing ROI with a Data-Centric Approach for Banking – Part 1.
How Modern Banks Alleviate Data Exposure Risks and the Hidden Costs of Not Managing Data Over Time: An interview with Tom Berger and Asad Mahmood
The nature of banking has been changing for years, and the pace of that change has only been accelerating. Data is critical to all banking institutions, large or small. Banking customers need instantaneous access to their accounts, and banks need the technology to provide those interactions seamlessly to their customers. In this two-part blog series, we look at the role data is playing in the banking industry and how HSO is helping banks of all sizes leverage their data to remain competitive and relevant.
How does a mature company move to a data-centric approach?
Tom Berger: We’ve been talking about how the key to a data-centric approach is to be agile so that you can do whatever you need to do quickly without significant development time. This approach also helps new banks introduce competitive products and services faster than their competitors. Quicker-to-market and faster onboarding accelerates ROI and improves the customer experience.
Let’s pivot now to the other type of customer: a very mature global organization located in several geographies with multiple infrastructure investments around their data. Asad, can you talk a little about how HSO assesses the data infrastructure for a mature company looking to move to a more data-centric approach and the ROI a company like this can expect from this assessment?
Asad Mahmood: Sure. The challenge with a mature organization is opposite to that new bank we discussed earlier. This is an existing organization with a large global footprint. Typically, they are expanding rapidly into different geographical regions with an aggressive merger and acquisition strategy.
So, for them, the challenge is managing the massive data footprint from their various legacy applications, both within the organization itself and from the companies they acquire. How do you onboard a new company and its data quickly and still maintain the integrity of the existing business management applications and the associated data for those applications?
We recently completed an assessment for such an organization. Once we had a chance to look at their overall system architecture, we saw that their infrastructure was set up in such a way that it would require building an extensive catalog of where the data is located. There were terabytes of information, much of which was duplicated across multiple data points and thousands of databases.
What did HSO’s assessment uncover?
Tom Berger: What were the results of your assessment?
Asad Mahmood: Leaving their data in multiple databases would create ongoing problems for the organization, and it is not simply limited to the increased time and effort to manage each database separately. Every time a team tries to build a new product or application, they have to access multiple databases, each with different ways of storing its information. It is also difficult to perform meaningful data analysis to extract patterns and identify the value hidden within them to determine where cross-selling or upselling opportunities exist. Moreover, with multiple users accessing critical customer data across various global systems, there is increased exposure to risk for the organization to ensure proper data security and governance.
We proposed an aggressive, modern data mesh architecture for this organization’s global data positioning. This approach lets the organization build more, better apps quickly. Development teams are not spending time accessing five different systems and creating dozens of Extract, Transform, and Load (ETL) jobs and then creating an app.
- Now they simply need to subscribe to a single data product to get the information they need and then subscribe to another domain to provide or receive the information necessary for the operation.
- By consolidating the data into one place, we were able to eliminate the data silos and the tribal knowledge where only certain people know where the data is being housed and how to access it.
- Moreover, everyone is governed, so only those users who should have access to the data are granted access.
On the analytics side, they can quickly analyze the data and identify the patterns where they should cross-sell or upsell each of their products in different geographies and territories. This is a huge benefit for sales and marketing teams at these kinds of organizations.
Fear of modernization is costing more than organizations realize
Asad Mahmood: Unfortunately, many companies are reluctant to modernize, fearing that it will cost them too much money. These companies don’t realize that keeping things the same not only maintains these inefficient data silos and governance issues, but still costs them money in time, effort, and subscription fees.
Our analysis took only three weeks to complete. Typical payoff expectations are one year; yet we could show a tangible ROI of a three year, 10x payoff the initial investment with reduced costs going forward. With this organization, we saw that the modern initiative around data could alleviate those data-silo problems and give them the agility they need. Our solution also provided intangible benefits, including alleviating data exposure risks, streamlined processes and governance, and greater insight into the data.
How can modern banks alleviate data exposure risks and the hidden costs of not managing data over time?
By helping you consolidate data, sunset legacy infrastructure, and get your data under control, HSO can show your organization hard numbers with measurable ROI. Whether you are a mature company or an emerging business, our methodology is focused on agility and an immediate return on investment.
Return to Part 1: How a Data-Centric Approach Is Disrupting the Banking Industry and Accelerating ROI
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Contributor: Tom Berger
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