The Bank of the Future Will Have Data Vaults and Money Vaults
The financial services industry has seen a great deal of disruption from digital-based alternatives. Many of these challengers use advanced technology and expanded data sets to offer apps that provide financial solutions at a lower cost, with less friction and greater personalization than traditional bank or credit union offerings. Toronto-based startup Flybits believes that the best way to compete in the future is not just by developing innovative products and services, but by becoming the repository of choice for data in addition to money.
“I definitely see that banks are in a perfect position, if they innovate right, to be the perfect data vaults for the future – managing the privacy and also the data of their customers,” says Hossein Rahnama, CEO and Co-Founder of Flybits, in an exclusive interview for Banking Transformed, a new podcast from Jim Marous and The Financial Brand. “Using AI and machine learning, there is the potential to build a ‘data marketplace’ for banks, fintechs and other data providers to partner and build more services together.”
The key is the development of a platform that lets financial institutions customize communication to consumers based on contextual cues. For instance, a bank or credit union could offer personalized messages on a mobile app based on recent transaction history, the current financial portfolio held, the consumer’s calendar, and the location and current activity of the person being targeted. Integration of data and AI could also trigger digital concierge services, allowing access to expertise never before available – in real time and through the consumer’s preferred channel.
I interviewed Rahnama for insights into how banks and credit unions can better collect and utilize data, and how traditional financial institutions could be positioned as the trusted data repository of choice in the future. Here’s some of what he had to say.
Rahnama: If you look at the consumer sector you’re seeing that digital channels are becoming more predictive, more learnable, and more context aware. Think about Siri and Apple. Think about Amazon and Alexa. Think about Google Assistant and Google Live on Google. These are next-generation digital services that can learn from their users, and can get better as their users use them.
In the banking world, almost all banks are trying to build such services on their digital channels – next-generation concierge services that can understand the needs of their users and can adapt and give the right information to the right user at the right time. That’s what we refer to as “context-aware computing” or “contextualization.”
Building these types of capabilities in the past required a lot of I.T. processes, algorithmic expertise, understanding things such as statistical modeling and predictive modeling. Flybits has really simplified that process for banking institutions.
Instead of expecting the institution to hire data scientists and algorithmic experts, we have built platforms that even a marketing intern can be trained on, allowing them to focus more on use cases and creativity rather than worrying about I.T. complexities. This allows the bank or credit union to bring these next-generation predictive use cases to the market faster and in more efficient ways.
Rahnama: In order to build a capable, scalable, AI strategy for banking you need to have a lot of data, and you need to have a very good data strategy around that data. Flybits empowers the bank to leverage their proprietary data assets – correlating it with external data assets – putting the data sets together in an effective way to build customer logic.
They can use that logic to do better automation within the bank. They can also use that logic to engage with their customers better. But the key thing we highlight here is that customer identifiable information is fully protected and in some cases the banks don’t even see the individual data. We encrypt the data and tokenize the data.
