“Knowledge is power” so they say. And in the world of financial services and insurance (FSI), where the amount of data and potential knowledge is vast, this statement could not ring more true.
The ‘big data phenomenon’ means data is now available from many different places. Making sense of all this data can be a challenge. The sheer amount, its multiple locations, complicated by a complex regulatory environment, and a traditional unwillingness to embrace modern technologies, means many FSI companies struggle to benefit from big data and analytics.
However, this does not need to be the case. FSI companies can harness data and analytics' power using cloud technologies and turn this wealth of information into actionable insights. Let's explore 6 ways the cloud enhances data and analytics and how it can help you to become a market leader:
1. Connected systems
FSI companies can cut across legacy infrastructure silos and turn large amounts of internal and external data into market and consumer insights using the cloud. Furthermore, it is also possible to keep data out of clusters by avoiding virtual machines, which means when there is a need to scale resources, data does not go into additional silos.
2. Machine learning
Machine learning services available via the cloud improve transaction monitoring and develop better models. Machine learning-based early warning systems can monitor in real-time, like a credit risk. Also, the cloud allows FSI companies to streamline their processes. An example is the loan process, where it is possible to approve credit faster and offer products to clients in a more cost-efficient and engaging way.
3. Business processes
To provide punctual responses to customers on a large scale and 24/7 is cost-intensive, significantly when the technology of having chatbots can save the industry a large amount of money. With a functional design, artificial intelligence, machine learning, combined with authentic dialogue and data governance, will ensure the financial companies provide personal customer service that all together improve the overall customer experience.
Blockchain reduces the costs associated with financial transactions. Combined with the cloud, blockchain makes it easier to deploy and manage scalable, open-source blockchain-networks that support the financial assets' full lifecycle. The technology can be applied to all aspects of trade finance herein cross border payments. Hence, the cloud offers more efficient means of utilizing blockchain's power.
5. Monitoring and reporting
Once data is analyzed, it is essential an FSI business can apply it. Using cloud technologies, companies can create user-friendly, customizable reports, which can be integrated with third-party visualization tools for real-time exploration of complicated data problems. The cloud enables more holistic financial, regulatory, and customer service reporting.
6. Data mobility
Using a hybrid cloud solution allows FSI companies to move sensitive data in and out of environments as they see fit. With security and compliance being a consistent concern, FSI companies need to have the ability to seamlessly transition large amounts of data from on-premises to public cloud environments.
7. Data accessibility
The cloud enhances data sharing and visualization, so people from across the organization, who may not always be from a technical background, can make the best use of company data and analytics. This data can also be accessed from multiple locations to view it on various devices to enhance real-time decision-making further.
3 key business benefits
Using these cloud-enabled features allows FSI firms to manage risk more effectively, streamline operations, and create more personalized customer experiences.
Make more informed decisions
The sheer amount of data, both structured and unstructured, can be modeled and analyzed by FSI firms, allowing them to adjust their company strategies. For example, in insurance, this information could be used to make adjustments to risk appetites and make more informed capital-related decisions.
The Internet of Things (IoT) introduces ways to collect data on processes in finance and insurance, like capital modeling, with real-time data coming from internet-connected devices. Cloud technologies make it easy to store and run analytics on machine-generated IoT data and discover ways to reduce operational costs and increase output quality.
Uncover customer insights
The combination of cloud and big data provide FSI companies more insights into their clients than ever before. It allows them to develop highly customized systems to their customers' expectations to account for differences in crucial demographics. This deep understanding will enable FSI companies to deliver incentives and services required to retain and grow the customer base.
Sebastian Fugl, Cloud Engineer at Sentia with 10 years of experience within cloud solution design, deployment and operations. As certified AWS Cloud Practitioner, former CISO and two decades of work within development, his professional experience covers several areas of IT which is why the consultancy of Sebastian is greatly appreciated among Danish organizations and start-ups.