3 Reasons Why Data Mesh Could Solve Your Bank’s Data Concerns
Data hubs, data lakes, data warehouses… Data mesh? Discover the new approach to managing data in financial services.
Data: a challenge that isn’t going away for banks. Getting data right can unlock customer insights, optimise internal processes and deliver better bottom lines.
Getting data wrong can hinder the digital transformation efforts of financial institutions and result in significant revenue loss. And when it comes to banks’ use of data, failure is easier than you think…
New thinking on data is needed to help financial institutions harness the power of data. And that’s where data mesh comes in: a move away from cumbersome, monolithic data architectures towards an approach incorporating the decentralisation and productisation of data, giving individuals complete ownership of different data segments.
Here are three ways data mesh could make a difference to your bank.
Change your bank’s perception of data
The vast volumes of data handled by banks, especially larger incumbent banks, can be off-putting for staff, especially those who lack experience in handling and processing data. Data mesh helps quell these fears through introducing the concept of data productisation.
What’s that? It’s where data segments are viewed through the lens of a product. This new perspective on data leads to a number of questions: to whom is this data relevant? What do customers want and expect from this data? In turn, the purpose behind data and where they fit within the wider organisation of the bank becomes clearer.
Data segments are also assigned to specific product owners and teams, meaning expertise can be funnelled to exactly where it needs to be. For instance, one team may be responsible for payments data, while another could be assigned control over the bank’s credit data.
Create more efficient system architectures
Data mesh gives banks the opportunity to rethink how they organise their data. What’s more, it gives banks the impetus to radically change their data architectures. Using a data mesh-inspired mindset to create a new data infrastructure increases accessibility and visibility, ensuring the right data can be more easily found at the right time. Applying the principles behind microservices architectures (in other words, modularising larger systems) to data can cultivate agility and scalability amongst teams, injecting much-needed dynamism into the way banks translate data into tangible insights about the wants and needs of their customer base.
Speed up digital transformation – without sacrificing quality
This new approach to data can have significant ramifications on a bank’s digital transformation process. A survey carried out as part of Cornerstone Advisors’ What’s Going On in Banking 2022 report found that a majority of leading banks have yet to get two-thirds of the way into their digital transformation processes. There’s a pressing need, then, for these banks to get a shift on…
Scalability comes first in a data mesh approach. And through scalability, digital transformation activities like data processing and insight extraction can be simplified and expedited. Data mesh can provide the focal point allowing multiple often competing digital transformation initiatives can be tied together as part of one wider effort.
How Critical can help you
Critical’s expertise in optimising data in banking goes back a while – 10 years, in fact. Over that time, we’ve encountered many banks and other financial institutions – from incumbents to FinTechs – who have faced challenges in their digital transformation journeys, including siloed working practices, friction between data teams and governance problems. In each case, we’ve delivered solutions and offered support in changing the way they leverage data to deliver stand-out business results.
Want to be at the forefront of data in finance? Download our free white paper on data mesh below.