Publication

“People say data is the new oil, but I like to say data is the new uranium. It’s extremely powerful, but it can be very dangerous because it can be used in ways we don’t intend.”

—Participant

The conventional wisdom is that data is one of the most valuable assets companies have, with some commenters referring to it as “the new oil.” Technology companies have reshaped the global economy by using data and technological innovation to drive their products and services. Banks sitting on mountains of data are realizing the enormous potential in the information that they maintain—and they are in the early stages of generating value from that data. Firms are already experiencing success using data to better serve their customers, improve efficiency across their organizations, improve risk management and monitoring, bring new and innovative products to market, and drive revenue growth. 

However, even as banks are racing to collect more data and use it in new ways, technical obstacles, privacy concerns, and regulatory demands are limiting their ability to do so. Meanwhile, third-party access to that data is expanding through things like Open Banking and application programming interfaces (API). The increasing public attention on privacy and data use also raises fundamental questions about different kinds of data and their relative value, risks and liabilities, and ethical uses, as well as questions as to who ultimately owns the data. Banking leaders are now realizing that their firms will require a more strategic approach if they are going to fully capture the value of data while avoiding potential risks and pitfalls. A director said, “In the past we have not been strategic enough in how we think about or talk about data at all, I don’t think any bank has.”

On June 7, 2018 (New York), and June 13, 2018 (London), BGLN participants met to discuss the emerging risks and opportunities around data in banking. In London, participants were joined by Open Banking Implementation Trustee and EY’s Global Fintech Leader, Imran Gulamhuseinwala. Drawing on discussions from both meetings, as well as conversations with network participants in preparation for and immediately following those meetings, this ViewPoints synthesizes the key themes that emerged:

• Data presents banks with opportunities for growth and efficiency

• Banks must adapt to evolving privacy expectations and regulations

• Access to bank data is expanding

• Data opportunities and risks require a strategic approach to data management and governance