Data is crucial for financial services institutions (FSIs) to succeed. Whether you’re looking to understand your clients on a more personal level or looking to gauge the market to capitalize on industry trends, the ability to use data effectively can give you a significant competitive advantage.
But many FSIs are held back by data silos and integration challenges. This can make it difficult to get the most out of your data. The Mulesoft Connectivity Benchmark Report 2024 found that 88% of IT decision makers across FSIs agree that data silos create challenges.
In this blog post, we’ll look at the importance of data in financial services and the challenges of financial data integration. We’ll discuss how a unified approach to data management can help you break down data silos, work more efficiently, and make better decisions. Doing so will help you deliver better experiences for your clients and drive growth for your business.
In this blog:
Financial services: a data-driven industry
Challenges in financial data integration
A unified approach to financial data integration and management
Benefits of data integration for financial services institutions
Data integration solutions for financial services
Financial services: a data-driven industry
The financial services sector is undergoing a data revolution. The industry is changing rapidly, and the ability to leverage data is key to staying competitive and successful. Ninety-one percent of decision makers across FSIs agree their organizations need to evolve to remain relevant.
2024 continues to be a landmark year in financial services, marked by significant changes in digital transformation. Artificial intelligence (AI) is revolutionizing every aspect of the sector. Realizing the opportunities of AI begins and ends with access to data.
Yet, despite the volume of data, many financial institutions grapple with the challenge of integrating information from disparate sources. According to the Mulesoft Connectivity Benchmark report, FSIs use an average of 1,026 applications across their digital landscape.
Core financial services systems like FIS, Mambu, and DuckCreek, customer relationship management (CRM) platforms, and external data providers each contribute to a vast pool of data that often remains isolated in silos. This fragmentation results in inconsistent data, which in turn jeopardizes accurate decision-making and the delivery of personalized customer experiences.
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Challenges in financial data integration
The journey to successful financial data integration isn’t without its hurdles, and the financial services industry faces unique challenges in this respect.
A significant barrier is the absence of standardized data formats. Financial institutions typically operate with disparate systems and applications, each with its own data format. This inconsistency can impede the integration of data from multiple sources and the creation of a unified customer view. It makes it difficult to effectively activate your data to improve your business and customer outcomes.
The siloed nature of data systems and the prevalence of legacy technology or “tech debt” pose additional challenges. Many financial institutions have grown organically over time, resulting in a complex IT landscape built on a disconnected ecosystem. This siloed approach hinders data integration efforts and limits the ability to extract valuable insights from the data. Compounding this challenge is the presence of legacy technology, which might not be compatible with modern integration solutions.
Security and privacy are top concerns in the financial services industry, given the sensitive nature of customer and financial data. The more sources of data you integrate, the greater the risk of a security breach or unauthorized access.
Without a comprehensive financial data integration strategy, IT leaders and teams are burdened by maintaining versus innovating. Trying to stay in lockstep with the fast pace of the industry proves difficult when you’re having to constantly update multiple disconnected legacy tools.
By proactively addressing these hurdles, financial institutions can craft data integration strategies that overcome these challenges and help them take advantage of the full potential of their data.
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A unified approach to financial data integration and management
Banks, insurance companies, and wealth and asset management firms undergoing digital transformation seek to achieve operational excellence and create personalized customer experiences. The strategic shift from siloed data systems to integrated data management will change the way you understand and serve your customers.
At the core of this strategy is a single, central data repository that serves as a comprehensive storehouse for both internal and external data. This centralized platform eliminates the need for manual data entry, reducing errors and improving operational efficiency. As a result, financial institutions can focus more on delivering great customer experiences, improving risk management, and meeting regulatory requirements.
With financial data integration, you’re able to make data-driven decisions like never before. Automated processes ensure data is consistent and accurate. This gives you real-time insights into the constantly changing financial landscape and your customers’ unique needs. Having a comprehensive view allows you to navigate market complexities with confidence and gain a competitive edge.
Integrated data helps FSIs truly understand their customers and allows you to offer products and services that are tailored to individual needs. This deep knowledge of customer behavior can be used to manage risk proactively, provide personalized financial advice and, most importantly, drive customer satisfaction.
By adopting a unified data management approach, you can position your institution for industry leadership and long-term success. You’ll be able to make better decisions, drive innovation, and deliver better customer experiences that set you apart from the competition.
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Benefits of data integration for financial services institutions
Integration is the key to unlocking the full potential of banking, insurance, and wealth and asset management services. By harmonizing and unifying disparate and siloed data into one comprehensive data model, financial institutions can take quick action and create personalized, real-time customer experiences.
For banks, integration brings together customer data from disparate systems to provide a single view of each customer’s financial needs and preferences. With this knowledge, banks can deliver personalized advice, create tailored products, and ensure a consistent experience across channels. Integration also helps to protect customer assets and data by providing real-time analysis of customer transactions and detecting potential fraud.
In the insurance sector, integration speeds up underwriting and improves risk assessment. By connecting external data sources, insurers can gain a more complete view of an applicant’s risk profile, leading to more accurate pricing, less manual work, and faster policy issuance. Integration also simplifies the claims process, connecting policyholder information, claims history, and repair estimates for faster resolution.
For wealth and asset management firms, integration helps offer holistic financial planning and investment advice. With integrated data from multiple sources, wealth managers can get a complete view of a client’s financial situation, risk tolerance, and investment goals. This enables them to create personalized investment strategies, make proactive portfolio adjustments, and provide timely reporting. Integration also helps with client engagement, allowing clients to access their financial information and make informed decisions more easily.
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Data integration solutions for financial services
Getting data from your FSI ecosystem connected is foundational to AI success. Having all your data in one place will enhance operational efficiency and deliver personalized customer experiences. But how do you get there?
With Mulesoft and Salesforce, FSIs can seamlessly integrate data from multiple systems to create a unified view of customer data. By connecting disparate systems, you can gain valuable insights and analytics. This allows you to make data-driven decisions and improve overall business performance.
Together, these tools provide a comprehensive solution for FSIs to collect, organize, and use data in a meaningful way.
Watch the Connectivity in Financial Services Powered by Mulesoft webinar to see how you can use the power of connectivity to enhance operational efficiency and deliver personalized customer experiences at your financial services organization.
