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You will not find someone more passionate than IBM's Paul Ewasuik on how Big Data & Analytics impacts business, government and society in the Caribbean. Paul talk to Smart Curacao about how Fintech is partnering with incumbent FIs to disrupt the region.
Paul is IBMs Representative for the Analytics Portfolio for the English & Dutch Speaking Caribbean. Spanning 23 Caribbean countries with over 70 products in the IBM Analytics Portfolio including:More
In an Aug ’17 report IBM talks about traditional laddered services in a bank. We know that not all of these services are equally profitable. Fintechs are cherry picking the higher margin services. Do you see this as an opportunity for positive disruption in the Caribbean?
@SmartCuracao - Great question, & yes-it compels FI’s to re-assess how they leverage ‘full service’ as differentiation. Similar to how you can take a best of breed vs single vendor approach in many industries. More services can mean more data for insights into customers & risk
You are a data expert. So what role does data play in this Fintech battle? How will it be waged and who will win?
@SmartCuracao - Data alone is not enough- it is ensuring your data is clean, reliable and has value. Strong fintechs build with this in mind. Traditional institutions typically already have valuable data but need to clean & consolidate it or they will be left behind... (1 of 2)
(2 of 2) @SmartCuracao -Traditional businesses are incumbents & have an adv. with existing data and customers. If they capitalize by making sense of their data & reinvent their processes they win. Otherwise, companies who build ground up the right way will steal their customers.
But fintech have difficulty accessing Big Data. Existing data is often not enough to support risk assessment on there potential market. How to we make data more open as Open Banking in the UK?
openbanking.org.uk
Open Banking leverages APIs to supplement and augment existing data. IBM also has a wide range of APIs to allow companies to capitalize on information and algorithms which are not cost effective to build ones self.
So access to Big Data is not a barrier for fintech to take on the Leviathan incumbents?
It depends. If the core competitive advantage of a fintech is its margins, or an efficient process - I would say it is not a barrier initially. However, when building a company from the ground up, if a Fintech takes Data Management seriously, they tee themselves up for longevity.
And the reason I say “takes data management seriously” is because if a company collects their data in a well governed and organized manner, soon enough they will have their own data set which is rather large, and suitable for valuable insights.
I understand that a company needs to have a strategy in place to leverage its data insights as it grows. However, for many upstarts there is not enough scale to gain meaningful insights from in-house data.
However, incumbent banks and other FIs do not want to open their data troves. Some just cannot because of antiquated systems that are fragmented. Some feel that data is their differentiation and do not want to open this data up.
How can a startup play that does not have the luxury of access to data such as UK’s Open Banking?
Re - Not having sufficient in-house data for meaningful insights. Then perhaps these companies may not need ‘Big Data’ but more BI, or lite analytics tools to capitalize on what they have without requiring a robust/complex Data warehouse. There are sltns for all sizes of company
Your 2nd point-I believe Data is the differentiation of traditional Financial institutions. Their disparate systems with fragmented datasets is one of the largest hurdles they have to overcome. Once that is complete, they are at a point of stronger competition in this new age.
Startups can compete w/o access to open data. Data may not be the 1st step for some fintechs, a cheaper way of offering services may be their starting point. Their competitive advantage should be their core. However data management will help them mature and continue to compete.
Understood. Smaller startups need to be nimble and use smart and light analytics tools in lieu of leveraging the muscle of big Data warehouses.
In conclusion, the challenge maybe that as fintechs innovates in a bubble, banks that are forced to open their data slowly become more nimble. See below how their services are becoming more UX savvy. See below example. Final thoughts?
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