Data science

3 Ways to Close the Data Gaps in Commercial Banking

Click to learn more about author Clayton Weir.

Over the last few years, retail banking has done a tremendous job of making the user experience sleeker and more frictionless. Yet, for all of the great strides that have been made in revolutionizing the retail banking experience – both on the front- and back-end – the commercial banking experience still has significant room for growth.

Digital transformation efforts during the COVID-19 pandemic have completely changed the way banks operate today. But when it comes to the commercial side of their businesses, many banks still rely on archaic methods and tools. Take data exchange, for example. Instead of offering sophisticated APIs to meet the data exchange needs of their customers, many commercial banks still rely on mass Excel data file dumps as the primary way to deliver data to and from customers. What’s more, once a client receives this data, the onus is on them to put it into an acceptable format for upload into their ERP. This has obviously gotten tiresome for commercial banking clients who have become accustomed to the ease of the retail banking experience.

With that in mind, banks are scrambling to close the gap between their retail and commercial banking experiences as competition for customers remains at an all-time high. And one of the foremost areas they are trying to improve is their data operations.

Here are a few ways that banks can improve their data operations and deliver the next-level experiences that their business customers seek.

1. Embrace Open Data and Banking

From enabling improved customer experiences to opening new revenue streams, the potential for open data in banking is massive. However, at the current moment we have really only seen the tip of the iceberg when it comes to the power of open banking – especially in the U.S. Granted, switching to an open banking model may seem like a formidable task for many banks. However, thanks to the groundswell of innovation in the banking and financial technology space today, adopting modern methods and tools has never been easier. Additionally, once banks have transitioned to a more open model, it will become easier for their entire business to become more agile and responsive.

2. Rethink “Building It Yourself”

When it comes to technology, banks continue to stumble when it comes to building their own technology. Manufacturing APIs and other tools can be both a time- and capital-intensive process. Additionally, given how rapidly customer expectations are changing in the commercial banking space today, self-built tools are often outdated by the time they hit the market. Therefore, banks need to begin thinking outside of their organization for technology options that can deliver the solutions they need today and tomorrow. If not, banks will likely be stuck playing catch-up instead of beating out their competitors.

3. Adopt Embedded Banking

The commercial banking experience today is laden with a seemingly endless number of hoops that business customers have to jump through to accomplish their day-to-day tasks. But what if all of these processes could be consolidated and integrated natively into the platforms business customers already use every day? They can: Through the power of embedded banking, banks can unlock a much more streamlined and efficient end-to-end experience for their customers. More importantly, by adopting embedded banking, banks can eliminate the need for additional manual legwork, meaning their workforces can focus more squarely on business growth versus busy work.

Conclusion

The digital banking revolution is not going to slow down anytime soon. And as consumers become more and more accustomed to the seamless world of retail banking, calls for improvements in commercial banking are only going to grow. And while this may seem like a challenging undertaking, by adopting new data handling tools and processes, banks can make significant customer experience gains in a very short space of time. Moreover, by modernizing their data ops, banks can better position themselves for the challenges of both today and tomorrow.

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