Accelerating the Pace of Digital Transformation in Banking

Digital transformation is helping financial institutions thrive during a period of unprecedented change. Integrating digital technology into every aspect of daily operations is empowering banks to embrace a data-driven future. Let’s explore digital transformation in banking and see how today’s financial institutions are leveraging cloud technologies to meet a range of challenges. 

Why Digital Transformation in Banking Is Needed

Financial institutions are facing a variety of challenges. An uncertain macroeconomic environment, increased financial regulations, new competition from digital-only companies, and fast-changing consumer demands are forcing banks to evolve, and quickly. Here’s why legacy technologies are holding companies back and why digital transformation in banking is needed.

Increased competition from neo banks

Fintech companies and neobanks are leveraging modern technologies to provide customers with innovative financial products and quick, responsive service. To accomplish this, these organizations are building their systems from the ground up using the latest cloud-native infrastructure and a big data tool set, including machine learning, artificial intelligence, and advanced analytics. 

Customer demand for personalized service and product offerings

Customers now expect excellent service and customer-centric digital experiences, on-demand across multiple channels. Delivering a seamless, multi-channel experience across mobile apps, the web, and in-person touchpoints has become an essential part of the customer service experience. Providing promotional offerings for financial products such as loans or credit and debit cards is fast becoming the norm.

Legacy systems are ill-equipped for big data applications

Legacy systems weren’t designed for the massive amounts of data or modern data workloads that forward-thinking companies are taking advantage of. As more and more aspects of banking move to the digital space, outdated systems are slowing down the pace of innovation. 

How a Cloud Data Platform Enables Digital Transformation

A cloud data platform is the foundation of digital transformation in banking. With near-limitless data storage and on-demand, rapidly scalable compute power, a cloud data platform can help financial institutions break down the technology and data silos that inhibit growth and innovation.

Innovate new financial products and services

A cloud data platform eliminates the challenges posed by fragmented data and enables banks to employ Customer 360, bringing together data from various sources and formats into a single, secure repository. Cloud data platforms such as Snowflake offer data enrichment with data from third-party sources, including demographics, identity, macroeconomic, and alternative data. With this data, financial institutions have the ability to suggest the right product recommendation at the right time, creating valuable cross-selling and upselling opportunities. 

Enable data-driven automation

Data-driven automation helps employees focus more of their attention on higher-value tasks, such as providing superior customer service. One example is the deployment of artificial intelligence (AI) as part of the lending process. AI technologies and machine learning (ML) are capable of analyzing data used in credit scoring and other factors that influence loan approval more quickly and efficiently than a human underwriter. Properly trained machine learning models become more accurate over time, further increasing their value.

Simplify regulatory reporting

Regulatory reporting requirements are growing increasingly complex, especially for larger banks operating in multiple countries or regional jurisdictions. A cloud data platform enables risk and compliance teams to power all reporting obligations, including Dodd-Frank, FRTB, or Basel III using a single copy of data. Built-in security and governance capabilities allow financial institutions to protect, store, and access their data with controls that enable them to meet risk needs and compliance requirements. Multi-cluster concurrency allows multiple teams to run reports simultaneously with no resource contention.

Mitigate financial crime

The cloud data platform’s shared data architecture provides near-infinite scalability to ingest, store, and analyze massive volumes of data, allowing financial services organizations to consolidate their data and technology silos onto a single platform to perform enhanced due diligence and build real-time fraud and anomaly detection. Machine learning-enabled technologies such as neural networks can detect fraud-indicative anomalies based on the established behaviors of individual account holders. Similar technologies can be used to proactively detect markers associated with money laundering and other financial crimes.

Unify cybersecurity operations

The cloud data platform allows financial institutions to pool all of their security-relevant data together into one place, often a modern security data lake. This cybersecurity framework offers virtually unlimited storage, elastic, rapidly scalable compute resources, and powerful analytics. Unified data creates opportunities to automate formerly manual processes, enabling swift threat detection and response to a range of cybersecurity threats. 

Securely share sensitive data with data clean rooms

Cloud data platforms support data clean rooms. A data clean room is a framework that enables secure, multi-party data collaboration. It’s designed with strict safeguards for protecting data privacy while enabling data sharing, double-blind joins, and restricted queries that allow different organizations to share and match customer data without having to disclose any underlying data. The ability to merge data from multiple sources strengthens fraud detection efforts and powers marketing initiatives such as developing enhanced Customer 360s as well as creating highly personalized product offerings.

Monetize custom data products

Banks collect and store an enormous amount of data on their customers. Much of that data holds value to other industries, such as retail, telecommunications, and travel. Banks can create custom data products, selling them securely via a third-party data marketplace. 

Powering Innovation in Banking with the Financial Services AI Data Cloud

Banking’s digital transformation begins with Snowflake. The Financial Services AI Data Cloud helps financial organizations thrive in a data-intensive, highly regulated, and competitive environment. Accelerate the pace of digital transformation with the help of Snowflake’s capabilities, tailored solutions delivered by Snowflake and our partner ecosystem, and the growing amount of financially relevant data that is natively available in the AI Data Cloud. 

With Snowflake, you can effortlessly scale multiple workloads across different lines of business and across front, middle, and back offices with a single copy of data. Access 1,100+ data sets to power business-critical workflows—from quantitative research and insurance underwriting to financial crime compliance and regulatory reporting. With industry-leading security and governance, you can protect, store, and access all portfolio, reference, market, and risk data with fine-tuned governance and access controls, infrastructure as code, and private network access.

Try Snowflake free for 30 days and experience the Financial Services Data Cloud that helps eliminate the complexity, cost, and constraints inherent in other solutions. Available on all three major clouds, Snowflake supports a wide range of workloads, such as data warehousing, data lakes, and data science.