BID® Daily Newsletter
Mar 3, 2023

BID® Daily Newsletter

Mar 3, 2023

Adopt a Shared-Service Mindset for Data Storage

Summary: The collection of data is only increasing. By 2025, the world’s collective data repository will reach 175 zettabytes (which is a trillion gigabytes), further necessitating the need for intelligent document processing. We discuss why shared services and intelligent data processing matter to your institution, particularly how they can positively impact your relationships with your customers, employees, auditors, and other stakeholders — and ultimately your bottom line.

Thousands of workers from a myriad of ethnic and cultural backgrounds who built the Transcontinental Railroad in the 1880s slept together in bunkhouses. Young college students from all walks of life still share dorm rooms. International hostels from Bangkok to Buenos Aires to Boston host folks from around the world in common rooms with bunk beds. The common denominator? Shared spaces.
Sharing resources definitely has its benefits — especially when it comes to data collection and storage. Financial institutions (FIs) alone collect and store a metric ton of customer and internal information, which can also include unstructured data such as images, emails, and PDFs. When you combine that with every other industry and corporation collecting data, you have a massive collective data repository to contend with. The International Data Corporation reported 33 zettabytes (ZB) of stored data in the global data sphere in 2018: by 2025, they’re forecasting an increase to 175 ZB.
That is a lot of data to parse and store, which is typically made more complicated by duplicated data and any inefficient data collection practices.
The Problem

When your existing customers apply for additional products and services at your financial institution, do they have to complete the same forms as when they applied for their first product with you? If they do, that might be because your respective lines of business aren’t sharing documents with each other.
Recreating the wheel, so to speak, every time a customer wants to do more business with you can damage that relationship — so much so that they may just start shopping around for another institution or a fintech that can offer a better customer experience.
Having a hodgepodge of data centers in every business line with customer information spread across each one is also a major headache for your auditors. Collecting and organizing all that data, along with tracking down unstructured customer information still sitting in staffers’ emails or on different branch computers, can seriously frustrate auditors and make the preparation and review process even more time-consuming, laborious, and expensive than it needs to be.
A Shared-Services Solution
These are just some of the reasons why your institution should strongly consider adopting a shared-services mindset by implementing a cloud-based central repository that relies on intelligent document processing. Using artificial intelligence and machine learning algorithms to read, understand, extract, clean, analyze, and properly classify both structured and unstructured data across business lines can create a central repository containing consistent and accurate customer information. Most importantly, this data can be easily accessed by all business lines, which means trading out redundant tasks for streamlined processes that help your institution’s customers, employees, and auditors.
Moreover, information within the central repository is also integrated into all of your respective workflows to glean insights on how to best strengthen customer relationships through more timely upsells and cross-sells. Simply put, intelligent document processing can provide your institution with a more holistic view of your customers that benefits them, your employees’ morale, your auditors’ patience, and ultimately your institution’s bottom line. You not only save money and effort, but you ultimately can make more money in the process.
Implementing an intelligent document processing solution can be done all at once or incrementally, though most consultants recommend that community financial institutions (CFIs) create bite-sized pilot programs within specific business lines. Many CFIs start with the lowest-hanging fruit — their loan underwriting processes, which can give them a more immediate bang for their buck. These quick wins can help your institution develop a methodology for further implementation across more business lines and create momentum for the broader effort.
Not only will a shared-services approach to customer data help your institution save costs and make countless processes more efficient, but you can also drive more revenue generation by better identifying upsell and cross-sell opportunities.
Furthermore, prospective fintech partners could very well look more favorably upon your institution for possible embedded finance collaborations because your data will be housed in a smart integrated system that makes it easier to do business with them.
Subscribe to the BID Daily Newsletter to have it delivered by email daily.

Related Articles:

How Hiring Hackers Can Make Your Institution Safer
The average cost of a data breach in the finance industry is estimated to be $5.97MM. Increasingly, financial institutions are using so-called white hat hackers to test the security of their systems. We discuss how they can help you improve your cybersecurity and protect your CFI and customers.
Getting the Most from Cyber Insurance
Cyber insurance can be part of protecting against digital crime. We discuss how it can protect financial institutions and their customers against financial losses and provide other resources if and when a cyberattack occurs.