How can data analytics impact decision-making in the fintech industry?

Data has become an essential driver for new monetisation initiatives in the fintech industry. Vast amounts of data are collected from customers, transactions, and market movements, among other sources. This offers tremendous potential to extract valuable insights that can inform business decisions, improve customer service, and create new revenue streams.

Considering today’s mobile-first-, mobile-almost-everything world, there has been a surge in the use of mobile banking applications. With more people relying on mobile digital transactions to check balances, make deposits and payments, and execute trades, fintechs are able to collect a massive amount of data on a wide range of customer behaviour. This data and other sources represent key opportunities for decision making and data monetisation.

For example, in retail banking, customer transaction data can be used to develop personalised financial products, such as credit cards and investment portfolios, tailored to individual needs. In investment banking, data on market trend and investor behaviour data can be used to create new offerings, such as derivatives and structured finance products.

However, protecting customer data and adhering to data privacy laws is critical for fintechs. The phrase “with great power comes great responsibility” comes to mind. In order to make better decisions, while still respecting the privacy of their customers, fintechs must implement robust data protection measures and adhere to relevant regulations. This includes implementing strong security measures, such as encryption and multi-factor authentication, and only collecting and using data with customer consent. 

To fully realise the value of their data, fintechs must create a data-driven culture that prioritises the use of data in decision-making and innovation. This includes investing in modern data architecture, which enables them to store, process, and analyse large amounts of data in real time, while also protecting the privacy of their customers. By using data to inform their strategies and operations, fintechs can better understand their customers, improve their risk management, and identify new opportunities for growth.