VIRTUALBANKING: The Power of Data as an Asset in Digital Banking

Our digital banking core beliefs shape the way we approach our work. Our first core belief centres around the power of data and its impact on the customer banking experience. In this article, we dive deeper into this belief and explore the importance of investing in proper data technology.

In today’s modern banking landscape, it is impossible to overstate the value of data and the power it wields to drive the success of both traditional and digital banks. Traditional banks typically rely on data to generate customer insights and improve their risk management, compliance, and fraud detection capabilities. Meanwhile, digital banks heavily rely on data to shape their customer experience strategies, given that their primary touchpoints are online and mobile platforms.

Harnessing the power of data is essential for delivering a banking experience that is highly convenient, innovative, and hyper-relevant, ultimately driving customer loyalty. The growing trend of investment in data-driven solutions shows that banks and financial institutions recognise the critical role of data in their digital transformation efforts.

The state of digital banking

According to a report published in 2022, the banking industry is set to experience a 22.97% compound annual growth rate (CAGR) for big data analytics by 2028. The Asia-Pacific is leading this growth, with a projected 19% increase in spending on big data analytics solutions by 2022 and an expected market value of USD 53.3 billion by 2025.1

The increasing number of digital users fuels the adoption of big data analytics in the banking industry. For example, one of Southeast Asia’s largest banks, reported that in 2020, more than 95% of regular banking transactions, such as fund transfers and bill payments, were done digitally through their mobile banking app, or via their website.

The bank saw twice as many new monthly active users on its digibank services and double the number of outgoing transactions on PayNow, a real-time payment system adopted by the Singapore banking industry, in 2020. These developments are a testament to the bank’s digitalisation efforts. Notably, the bank’s cost-to-income ratio for its digital segment was 30% lower than that of its traditional segment in 2020, compared to a 20% difference in 2019, indicating an improved financial performance.

Why should banks invest in data technology?

Banks that fail to realise the importance of investing in proper data technology run the risk of missing out on its benefits and facing potential challenges that hinder their ability to make well-informed business decisions. Optimisation in data technology has proven to provide strategic advantages:

  • Data optimisation increases competitiveness, especially against other banks that have yet to embrace the data-driven landscape.
  • The use of data analytics helps banks streamline processes, identify areas for improvement, increase efficiency, and reduce costs.
  • Access to data and accurate analysis lead to the discovery of revenue opportunities, allowing banks to identify new sources of income and growth opportunities. This also improves the bank’s ability to drive earnings, increasing profitability.

For digital banks, having access to proper data technology to generate insights about usage and behaviour enables them to make better decisions that enhance and personalise their customers’ banking experience. By analysing customer data, they can gain valuable insights, such as how their customers are being segmented, their spending behaviours, preferred transaction channels, and more.

Using all these information, banks can develop a business strategy that aims to offer a unique and improved customer journey. This, in turn, can lead to increased customer engagement, retention, and a higher customer lifetime value.

In today’s rapidly evolving landscape, it is crucial for banks to remain agile and stay ahead of the digital transformation curve by recognising the benefits of placing data at the crux of their solutions. By doing so, they can harness the power of data to drive success and deliver a banking experience that is highly personalised and relevant to their customers.

How we can support you in your digital journey

At Synpulse, our goal is to unlock the full potential of our client’s digital journey through our unmatched expertise in data technology. We are committed to delivering excellence, thanks to our team of subject matter experts who specialise in data modelling, analytics, and management.

We strive to provide our clients with our business and technology expertise for a seamless end-to-end project delivery. With support from our sister brand Synpulse8, we offer comprehensive solutions that address any gaps in data-related areas, ensuring that we fully meet our clients’ needs.

Speak to us to learn more about harnessing data and realising its full value.

Read about our VIRTUALBANKING core beliefs

Leveraging our experience at Synpulse, we have identified strategic themes and core beliefs that help banks shape their digital banking structure.

Our experts in this topic