From modern transportation to financial networks, we rely on digital data everyday whether it be at work, school, or play. And now, more than ever, this data needs to be carefully managed across different “boundaries,” without losing control. Considering how tightly integrated data is in our lives today, how did we ever get by without it?
Over the next few weeks, this blog series will examine the important role data plays in various industries and the impact of going a day without data…
The Data Fabric of Financial Services
From virtualized trading desks to globally accessible bank accounts to e-commerce, today’s financial industry cannot operate without data and technology. Basically, your childhood piggybank is the last bastion in the world of finance that isn’t intertwined with data.
For consumers, data and technology have improved mobility, access and convenience. As with all things mobile, mobile banking apps have optimized the banking experience for each user. Mobile solutions mean that users can monitor their accounts and pay bills at any time, from anywhere. It also makes sending funds as easy as sending an email.
Additionally, how you pay is quickly changing with the advent of the Internet of Thing (IoT). We’re witnessing convergence between digital payment options and smart devices as new services like Apple Pay effectively replace the traditional wallet.
Data and technology is also making modern finance accessible in all corners of the world. Emerging countries are using digital technology to enable individuals of all economic backgrounds to participate in global finance. Ecuador last year announced its plans to introduce a digital currency. African countries like Zimbabwe are also empowering its citizen with Bitcoin, utilizing SMS technology to invest, save and share.
As technology and financial services become increasingly interdependent, what would a day without data be like?
Today’s banking experience is built on speed, efficiency and access – entirely made possible by technology. So to say the least, a day without data would have serious repercussions – not just for consumers or banks, but for the global economy as well.
Automated Teller Machines (ATMs) were the first real foray for most people into digital banking. They sped up the service, and meant you could grab cash on the go; generally improving the customer experience, but the benefits are two-fold.
For the banks themselves, mobile applications and ATMs greatly reduce the cost of doing business. Research shows that the average cost of a transaction using an online or mobile device is 56 cents, 59 cents at an ATM, compared to $3.97 with a bank teller.
Without data and technology, this means banks would be spending four times as much for transactions.
Crunching the Numbers
Data is now playing a major role throughout financial institutions. According to PwC, institutions that leverage data to gain insights into their operations, customers, and market can position themselves for ongoing success.
But the true value of data and technology isn’t just about improving operational efficiencies; it has basically changed how institutional investing is done. From digital stock markets to virtualized trading desks, most of today’s trading is handled virtually and doesn’t see the walls of global stock exchanges.
As highlighted in Michael Lewis’ follow up to Moneyball, Flash Boys, electronic trading has replaced the trading floor, forever changing the market. The book looks at how the speed of data has enabled banks to improve investments by capturing a better price.
Ultimately, the entire financial industry has become entwined with technology. Monetary infrastructures depend on it to enable global financial services. Data in particular has completely changed the financial experience and will continue to do so as we move into the realm of digital currency, i.e. Bitcoin.