By some estimates, more than 12 million petabytes of information will pass through the financial services industry globally in 2018 alone.
To get a sense of how much that is, it's been estimated that 2 gigabytes of data equals 20 yards of books on a shelf.
With 1 million gigabytes in a petabyte, banks and other financial firms are looking at one really long bookshelf.
Just how all that information will change bank interaction with customers was a major theme at the Amazon Web Services Financial Services Cloud Symposium conference held in New York on Wednesday.
“Data has become a new asset class,” said Gayle Sheppard, vice president and new technology group general for Saffron AI group, an artificial intelligence division of Intel. “It allows you to really know your customer and serve them in a very personalized way.”
Sheppard added that banks are privy to “a flood of data,” and can’t look at customers from merely a “transactional view” anymore; rather that they use such data to create a more holistic experience.
“It’s the bank of the customer now,” she said. “A customer wants you to be with them anywhere and everywhere and on any device.”
Indeed, using data to create a “full financial picture” of clients will be one of the major themes in the near future of financial services, said Anil Beniwal, director of engineering at the digital investment fintech Betterment.
“That means an investment firm knowing a client’s full banking picture, and vice versa, and each pulling from the other when necessary,” he said. “That adds a lot of value to the customer to have the full financial picture and what that means in making better [financial] decisions over time.”
Though such a synergistic scenario doesn’t exist now, it could become more commonplace in the future, especially as walls preventing data sharing are being broken down, such as the European Union’s General Data Protection Rule that went into effect this year.
The GDPR gives consumers greater control over their own data and who they can share it with. And in particular, the EU’s second Payment Services Directive (commonly known as PSD2) is seen as a harbinger of data use rules. The new EU directive allows individuals to share account data with third parties they authorize, thus putting banks in a position where they are not the sole owner of customer account and transaction data.
Statutes like PSD2 “will lead to the API-ization of the industry,” said Rob Krugman, the chief digital officer at Broadridge Financial Solutions. “When you start opening up all your APIs that is going to greatly change the business model; I don’t know exactly what it leads to, but it’s very intriguing.”
Aggregators are also seeking to strike a more collaborative effort on data-sharing. Envestnet’s Yodlee, Quovo and Morningstar's ByAllAccounts have come together to announce a data-sharing framework aimed at preserving innovation by providing the industry direction on transparency, traceability and accountability.
Banks and other financial firms will also use artificial intelligence and machine learning to glean quicker and deeper insights into volumes of customer data, said Intel’s Sheppard.
“The next wave of AI is reasoning systems,” she said. This is technology that “can tell how things are related, and is contextually adaptive.”
Rapid technology advancements should not only be for the benefit of customers, but also for helping employees get better at their jobs too, said John Dalton, vice president of research and innovation and Fidelity Labs.
For example, Fidelity last year piloted a virtual reality training session for contact center agents. Using VR, the trainees could see the homes of the people they were talking to and watch them as they conversed.
“It was a huge success. It generated much more empathy on the part of the agents,” Dalton said. “Also, it gave them a much more positive sense of organization; they felt Fidelity was helping them, instead of thinking about it as just one more damn training session to go through.”