In order to remain relevant, banks need to react quickly to customer behaviour, providing contextual, event-driven experiences that enrich the lives of customers.
Access to data reshapes how banks approach the customer experience, which is a challenge for banks that rely on legacy technology. Real-time analytics are key, and the arrival of mature, cloud-native core banking platforms like 10x make it easier to become an event-driven bank.
In this blog, we share five real-time data takeaways we've learnt from working with Tier-1 banks on core transformation projects, taken from our recent whitepaper, The Power of Data.
1. Slow data retrieval reduces business opportunities
Traditionally, banks have relied on end-of-day batch processes to extract data from core banking systems so they can run analysis on it and generate insights. Not only is that a cumbersome process that puts unnecessary strain on the system, it also means banks are missing out on lots of opportunities. Customers are beginning to expect real-time, hyper-personalized banking experiences, sending offers to customers based on what they were doing the day before means the opportunity will likely have already passed.
2. Event streaming makes real-time analytics happen
Next-generation core banking platforms like 10x use an event streaming approach. This enables different microservices within a bank to access data in real-time. Data is sent to one easy-to-access integration point, in a structured format, to make it easy to read and use.
Every time a customer performs an action, an event is generated and that data is made available to whatever business function needs it. This eliminates end-of-day batch processes and reduces the risk of extraction errors (such as wrongly mapped data fields).
3. Real-time data can solve many banking challenges
Unlocking the value of data solves many challenges across a bank. Here are some examples:
- Operations: Enabling real-time payment reconciliations
- Compliance: Making sure customer addresses are accurate by having one master address that other services can access
- Competition: Onboarding customers faster
- Customer demand: Providing more personalized services.
Not only does better use of data enhance the overall experience. It helps banks run more efficiently across the board.
4. The end of monolithic core banking
Monolithic mainframe architecture is not designed for 21st century banking. Making changes is cumbersome and risky - one mistake can take down the entire system - which also discourages banks from innovating or improving functionality.
By adopting an event-driven architecture, banks can split their business functions up into chunks, making it possible to carry out changes without popping the hood on the entire core banking platform, minimizing the damage if something goes wrong.
The event-driven approach is an upgrade on traditional microservice technology where data extraction is hardwired into a database (making it brittle to changes). In that world, multiple microservices would usually be hardwired into a database to extract the same data. With events, data is published only once and multiple microservices can subscribe to that data without needing to reach into the database directly, significantly speeding up changes and aiding faster innovation.
5. Rethinking data
Digital transformation is changing how banks’ think about data.
In this new world, data is a product that each business function produces and shares with other business functions to consume. This is supported by the concept of the data mesh - a way for banks to share data across the business through a decentralized model where all of the business functions are responsible for ensuring their data is fit for consumption (as opposed to it being the responsibility of a central data team).
The data mesh ensures data that is published conforms to a consistent structure and that it is schematized and clearly tagged so people can easily identify what the data is and how it should be used—something that is particularly useful for record keeping and compliance.
If you're looking at how to bring real-time analytics to your bank, check out our whitepaper, The Power of Data.
To see the power of real-time data in action, get in touch today.