The dramatic events of 2020 saw the world move online to a greater extent and at a more rapid pace than could have been predicted. People were forced to digitalise their work, social lives and shopping as well as the way they bank. The result? While 2020 posed myriad challenges, it simultaneously sped up digital transformation and created a string of new opportunities for data within financial services and regtech.

At a time where people were unable to do their banking in-branch, digital banking presented practical solutions. 2020 saw 64 per cent of banking customers opt for fully digital onboarding when creating new bank accounts, with 70 per cent of large banks offering fully digital onboarding practices.

Fast forward to 2021 and as people continue to operate online, financial services have been presented with a wealth of data sources and behavioural insights that can be harnessed to inform risk and service decisions. From social media and website search data through to geolocations, mobile phone usage and behavioural biometrics, the availability of data from new and emerging sources is enormous and evolving. As an example, the Philippines-based CIMB bank uses smartphone data to assess behavioural scores for applicants and it is highly unlikely to be  alone in doing so.

For many, this data evolution presents a glut of new opportunities, ranging from better understanding of customers through to tailored financial products in the front end and watertight compliance, horizon scanning and prudential processes behind the scenes.

For others, data pose real challenges that extend far beyond traditional concerns of storage and security. Data ethics, data hygiene and issues surrounding bias all come to the fore, on the premise that your data-made decisions are only ever as good as the data you feed into the process. Moreover, there are issues surrounding consent and customer need; do individuals want to have their phone activity tracked in order to receive better services and products from their bank? 

It is with these challenges in mind that we have started to see financial organisations making new hires to tackle data. There has been a 67.9 per cent increase in chief data officer hires in the past nine years. Including un the UK, where the Financial Conduct Authority (FCA) made significant data-focused hires in 2021. As data evolves, we will undoubtedly see a transformed workforce, with a focus on upskilling to ensure employees understand and manage data.

Data could inevitably be the cure to financial services and operational woes, though for some it remains hard to deal with. The organisations that will be successful are the ones that know what they need to do, when they need to do it, and have the resources in place to put data plans into action.

Find out more about the emerging opportunities presented by data, by reading CUBE's latest report, Data: Poison or Cure?, in association with fintech research company, Burnmark.