Q&A Featuring Forrester Principal Analyst Sam Higgins: Accelerating Banking Innovation Through Enhanced Data Integration

Featuring Research From Forrester Create A Roadmap For A Real-Time, Agile, Self-Service Data Platform​

Introduction and Webinar Background

In early June, we facilitated an expert panel discussion with guest speaker Forrester Principal Analyst Sam Higgins exploring the crucial role of data integration in building a successful digital banking experience. As a follow-up to the webinar, “3 Best Practices to Accelerate Banking Innovation Through Enhanced Data Integration” , we asked Sam to share more insights into the key questions addressed during the event.

The digitization of the customer experience has transformed banking business models, and online and mobile channels now dominate the way people access financial services. The resulting battle for customers between traditional models and digital-native disruptor models has become intense. At the same time, global regulators are increasing pressure by introducing open banking, bringing transparency in the provision of financial products and services.

Question 1: What are the major market forces shaping modern digital banking solutions?

Higgins: Banks are at the center of a perfect storm. Digital disruption, rising customer expectations, new digital-only competitors, and a tough economic environment are all bringing unprecedented challenges to the industry. More than ever, banks need to reimagine their business by leveraging their core strengths and developing creative ways to capture new growth. While most digital experience initiatives concentrate on next-generation digital platforms, banks are also working on improving customer service, redesigning branches, and strengthening loyalty programs. But investing solely in front-office systems and processes can only take a bank so far toward delivering truly differentiated CX. Leading banks are modernizing their legacy systems and operations by being more data-driven and automated.

Question 2: How can banks use data integration to differentiate the digital experience customers receive?

Higgins: According to the Forrester Analytics Consumer Technographics North American Financial Services Topic Insights 2 Survey, 2019, between 30% and 47% of consumers do not think of banks as very different from one another, even as they see many disruptor brands as unique. As this imbalance favors challengers, the result will not be a sudden spike in attrition but rather a sustained degradation of traditional bank brands’ value. Although everyday banking transactions are about completing a very specific goal, it turns out that emotion is the largest contributor to a bank brand’s energy. This requires a shift from providing process-oriented financial products to offering support for a customer’s lifelong financial well-being. By using data-driven insights to anticipate and then exceed customers’ needs and expectations, banks can engage customers in their real-time context at any step of their life journey and provide a more holistic experience.

Question 3: What are the key technology challenges banks must consider when integrating data for digital service delivery?

Higgins: We observe financial institutions actively using APIs to open their data and innovate at speed, while others are looking to leverage the abundance of data at their disposal to generate near-instantaneous business insights in pursuit of improved digital service delivery. In both cases, building out a contemporary data platform is a critical step in delivering against these outcomes, especially in order to integrate these capabilities within digital and mobile front ends so as to provide a complete real-time customer experience. To keep up with such a rapidly changing landscape, such platforms should evolve continuously — but without breaking the architecture. This requires banks to address traditional issues associated with data integration solutions such as scalability and security. But they must also address new challenges such as real-time sourcing, cleansing, and enrichment of data from multiple systems to support in-the-moment personalization across diverse digital channels and endpoints.

Question 4: What are the critical best practices required to harvest the benefits of adopting contemporary data integration solutions?

Higgins: The core tenet of a successful data platform is to ensure the underlying integration capabilities are evergreen and continuously upgraded with best-in-class components aligned with the evolving demands of the bank. DevOps and DevSecOps practices have been accepted as the benchmark for agile and incremental delivery of digital banking applications, and data integration requires the same level of investment in operational practices. This complementary “DataOps” approach should aim to eliminate within the data integration team the manual effort of managing data. It should enable data traceability, granular control, improved quality, and timely delivery using containerization to provide a highly portable “integration as code” approach. Crucially, adopting a DataOps model requires a data platform that can support automation to ensure delivery can meet the business demand while remaining stable and secure.

Question 5: Where does the increasing use of hybrid and multicloud platforms by banks fit within a modern data integration strategy?

Higgins: Supporting multiple platforms, both cloud and non-cloud, addresses the realities banks face in terms of security, compliance, and cost of change for legacy solutions, while also providing for flexibility and choice. At the same time, a bank’s wider digital ecosystem participation will drive adoption of various cloud platforms, which, in turn, increases operational complexity. Therefore, future-proofing a bank’s data integration architecture requires the adoption of technologies, such as enterprise container platforms and event streaming services, that support a truly hybrid and multicloud-agnostic deployment model. Wherever possible, banks should look to adopt solutions for which the underlying platform’s engineering problems, such as portability, have already been solved, so they can focus on differentiating their offerings rather than building out technology stacks.

Dive Deeper

Watch the webinar featuring Forrester Principal Analyst Sam Higgins and our expert panel featuring Red Hat and Moneythor, along with Standard Chartered Bank, as they explore the opportunities and challenges associated with accelerating digital innovation through the adoption of enhanced data integration technologies.

Why Read This Report

Data bottlenecks create business bottlenecks. The days of provisioning data simply to meet the requirements of systems of record are over. Business stakeholders at the executive and line-of-business levels need data faster to keep up with customers, competitors, and partners. Information from the past won’t support the insights of the future — businesses need real-time data. This report shows enterprise architecture (EA) professionals how they can use data to transform their organization and keep pace with the speed of business. This is an update of a previously published report; Forrester reviews and revises it periodically for continued relevance and accuracy.

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