How banks of the future will use our data

Our data is important to banks. Especially to the banks of the future.

Recently, UOB Bank, one of Singapore’s top banks, announced that they will be building the first mobile-only bank designed for ASEAN millennials who prefer to bank on their mobile phones, anywhere and at any time.

According to the press release, the digital bank translates transaction data into actionable insights that make the banking experience interesting and fun while enabling customers to be smarter at saving and spending.

So, in effect, my digital footprint will be used to tell the bank how best to engage with me. And be relevant.

Whose data is it?

At the recent World Economic Forum in Davos, Sundar Pichai, CEO of Google Inc. mentioned that “data belongs to the user and as companies, we ( i.e. Google ) are only stewards of it.” So, taking our cue from this, when we sign on as a mobile customer with a mobile bank, we are owners of our data. When we use services on the mobile banking platform, including transactions involving sensitive data left behind by our digital footprint, who has rights over the data? We do. And banks are safe-keeping it for us, just like what they are doing with our money. Our data essentially is our asset. It belongs to us.

Following the time-tested success of using customer data to serve online ads, mobile banks can and are using our data to serve financial services. Have you been reminded to purchase travel insurance when you purchase flight tickets using your credit cards?

Real-time analytics and AI.

Artificial Intelligence models built on machine learning models are now supposed to help us be smarter at saving and spending. As we interact with mobile platforms, smart data infrastructure gather insights and run real-time analytics as we type. This is made possible with innovations in data storage and processing solutions, such as persistent memory from Intel, which can serve data to the application within microseconds. That’s a thousand times faster than the blink of an eye.(1)

One day the mobile banking app will tell you if you can afford that new shirt the moment you set your eyes on it.

This comes at a cost to us. Banks will be generating new streams of revenue by using what is rightfully ours as a source of “capital”. Shouldn’t we be charging banks as they are now leveraging my assets to grow their business?

Data portability will drive adoption.

Quasi-government organizations such as the Personal Data Protection Commission in Singapore recently issued a paper(2) on data portability and accessibility across organizations. Similarly, the European Union’s General Data Protection Regulation ( GDPR ) also stipulates that where technically feasible, the data subject shall have the right to have the personal data transmitted directly from one controller to another(3).

One of the benefits of making data portable is to lower the barriers to competition. If I decide to switch banks, I would like to be in a position where I can easily bring along my data bank which details my financial habits and transactions to the new bank.

So it looks like regulatory frameworks will ensure I have control over my data . Banks with siloes of data kept in “walled gardens” will adopt Open Banking(4) policies to run their businesses and connect to new data fabrics stitched across networks.

In this latest foray into mobile banking, UOB Bank announced that it aims to build a customer base of up to five million users in the next five years. This translates to 2700 new customers every day. That’s a lot of data. And a lot of service fees for the bank.

Consumers will benefit

It is a win-win situation. Banks “milk” our data to come up with new services we’ve never experienced before. We obey Jane the smart and pretty chabot on our phones when she gently advises that we’ve had 5 milky lattes this week, and we should go try an Americano instead. ( Did you also know that Joe’s Café in the next block is having a promotion on Americanos in the next hour? )

If we obey Jane, we might save some money and lose weight.

Jane will also monitor and remind us that our BMI(5) is over the limit ( based on the last data sync from the health app, linked to the mobile banking app over the cloud via APIs) and hence no more lattes for the rest of the month until the BMI is under control. Jane is also sociable. She will find other chatbots to exchange data around health monitoring, travel booking, theatre reservations, the best place for sushi and anything else that has a digital domain.

I am getting richer and fitter. Thanks to my mobile banking app. And I’m not complaining.

Just give me freedom to do what I want with my data. My asset.

(1) https://en.wikipedia.org/wiki/Blinking, blink of an eye varies from 100 ms to 400 ms

(2) Personal Data Protection Singapore, Discussion paper on data portability

(3) Article 20 of the GDPR — Right to data portability, and Recital 68 — Right to data portability

(4) http://fintechnews.sg/24627/fintech/open-banking-in-asia/

(5) BMI, or Body Mass Index, is a widely acknowledged form of measure of how much fat we have in our bodies