# Can banks compete in the digitisation race without effective data integrity?
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-06-14
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: The Future of Banking: Embracing Digitisation and Data
Meta Description: Learn why data integrity is crucial for banks in the digital age, and how established banking brands can stay competitive against big tech players.
URL: https://financedigest.com/can-banks-compete-in-the-digitisation-race-without-effective-data-integrityhtml

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_By **Douglas Greenwell,** head of commercial strategy,_ [_Duco_](https://www.du.co/)

Banking has come a long way in the last couple of decades. Gone are the days when managing money was a chore involving trips to the bank and waiting for statements in the post. Digital-first banks such as Monzo and Revolut, coupled with the introduction of Open Banking, were the catalyst for mass digitisation that changed the consumer banking landscape forever.

Established consumer brands responded to the pressures on them by embracing [online and app banking](https://www.financedigest.com/dutch-online-bank-bunq-applies-for-u-s-banking-licence.html "Dutch online bank Bunq applies for U.S. banking licence") and investing in partnerships with the newcomers. But with the pace of digitisation only set to accelerate thanks to the entrance of big tech in financial services, traditional [banks face significant challenges](https://www.financedigest.com/big-banks-can-be-challengers-too.html "Big banks can be challengers too") to keep pace with digitisation.

Big tech companies such as Google, which recently announced its Google Accounts partnership with 11 banks, pose a problem for [established banking brands who are already fighting](https://www.financedigest.com/2016-the-fight-back-of-the-established-brand.html "2016 – THE FIGHT BACK OF THE ESTABLISHED BRAND") to keep their customer base. Google’s massive influence is a factor, but from a [technological point of view it’s their data](https://www.financedigest.com/manchester-arts-centre-the-lowry-selects-logpoints-siem-technology-to-safeguard-customer-data.html "Manchester arts centre The Lowry selects LogPoint’s SIEM technology to safeguard customer data") that presents the biggest issue. [Digital native companies are unencumbered by questionable data](https://www.financedigest.com/why-data-is-the-best-weapon-in-the-war-for-digital-talent.html "Why data is the best weapon in the war for digital talent") integrity, unlike established banking brands who have had to adapt legacy systems that were not designed for this level of digitisation.

Now established banks are faced with a choice: they must either invest in and embrace partnerships with [big tech allowing themselves to be led by external data](https://www.financedigest.com/the-benefits-of-big-data-how-to-convince-your-cfo.html "THE BENEFITS OF BIG DATA – HOW TO CONVINCE YOUR CFO") and insights, or they can take steps to improve data integrity management quickly and have access to their own insights which allow them to offer a customer experience that rivals the new big tech players.

### **Why is good data integrity important?**

[Data underpins all areas of banking](https://www.financedigest.com/reckon-introduces-link-to-bank-data-to-help-small-businesses-streamline-the-reconciliation-process.html "Reckon introduces link to bank data to help small businesses streamline the reconciliation process "), forming the basis for the entire financial ecosystem. If [data integrity](https://www.financedigest.com/how-green-are-your-investments-why-esg-data-integration-is-key-for-financial-services-firms.html "“How green are your investments?” – Why ESG data integration is key for financial services firms") management is not up to scratch, the whole system is working from poor-quality information. This results in a hampered ability to uncover valuable insights about customer behaviour and ultimately stops [financial services](https://www.financedigest.com/wrapping-financial-services-in-a-security-blanket.html "Wrapping Financial Services in a Security Blanket") firms from keeping their competitive edge.

Data integrity is especially important when considering the digitisation race because without good quality data at their core, [banks will be unable to make the most of technological](https://www.financedigest.com/6-technology-trends-banking-2019.html "6 Technology Trends for Banking in 2019") advancements. If two people are cooking the same meal but one person’s ingredients are fresh and the others aren’t, they will both produce the same dish but to a hugely different standard.

### **Why is managing data integrity difficult?**

![Douglas Greenwell](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/douglas-greenwell-duco-360px-2-1736838283930-compressed.jpg)

Douglas Greenwell

Managing data integrity is nothing new, but it’s a problem that’s getting more serious as banks grow in [size and increase their reliance on technology](https://www.financedigest.com/all-shapes-and-sizes-how-to-match-your-technology-to-your-finances.html "All shapes and sizes: How to match your technology to your finances"). [Data integrity has not improved at the same rate](https://www.financedigest.com/dollar-firms-after-u-s-labor-data-suggests-more-rate-hikes.html "Dollar firms after U.S. labor data suggests more rate hikes") as growth and tech reliance. According to an [MIT Sloan School report](https://sloanreview.mit.edu/article/seizing-opportunity-in-data-quality/), poor data integrity is costing organisations around 15–25% of extra potential revenue. This is because poor [data needs to be corrected and so institutions spend large sums of money](https://www.financedigest.com/your-money-is-safe-but-your-data-might-not-be.html "YOUR MONEY IS SAFE, BUT YOUR DATA MIGHT NOT BE") correcting errors or seeking confirmation from other sources. Bad data can also lead to regulatory fines, which [cost financial](https://www.financedigest.com/how-much-does-cloud-based-financial-software-cost.html "How Much Does Cloud-based Financial Software Cost?") service firms hugely.

It’s the larger more established banking brands that are suffering the cost of poor data [integrity far more than the digitally](https://www.financedigest.com/what-is-id-and-verification-and-why-is-it-such-an-integral-part-of-digital-life.html "What Is ID and Verification and Why is it Such an Integral Part of Digital Life?") native brands, simply because newer brands are not held back by legacy technology and processes. And while it’s unlikely that digital-first banks and [big tech](https://www.financedigest.com/startups-spring-from-ashes-of-big-tech-purge.html "Startups spring from ashes of Big Tech purge") will displace established banking brands overnight, the financial landscape may look very different in the future with newcomers accelerating technological advancements, underpinned by effective data integrity at their core.

We are at an inflection [point in terms of data technology in financial services](https://www.financedigest.com/service-the-cfo-why-context-is-worth-80-iq-points.html "Service & The CFO: Why Context Is Worth 80 IQ Points"). Gartner argues that the [world is within two years of reaching a “plateau of productivity” at which point it believes that CIOs will begin to see the true benefits of data](https://www.financedigest.com/bridge-the-gaps-in-big-data-and-cross-into-a-world-of-growth.html "Bridge the gaps in Big Data – and cross into a world of growth") integrity technology come to fruition. This is great news for the digitisation race, with traditional banks entering the plateau on equal footing with digital-first and [big tech banks if they act on their data](https://www.financedigest.com/banks-struggle-to-harness-big-data.html "BANKS STRUGGLE TO HARNESS BIG DATA") integrity issues now.

### **The new world of digital automation for banks**

The reason Gartner believes we are only two years away from seeing the [benefits of data integrity technology](https://www.financedigest.com/five-industries-benefiting-from-multi-carrier-sim-technology.html "Five Industries Benefiting from Multi-Carrier SIM Technology") is because of the way the tech has evolved over the past few years.

One such evolution is the idea of “no code”. No-code technology is technology that people outside of the IT department can build without needing a computer science degree. This gives the people using the technology the freedom to use and customise it as they see fit for their purposes.

The fact that no-code technology can be implemented, accessed and understood by everyone also removes siloes that can be created by the IT [department’s handling of data](https://www.financedigest.com/data-analytics-scenario-planning-and-the-finance-department.html "Data analytics, scenario planning, and the finance department") insights, effectively opening the door for innovation. The benefits are further enforced by robotic process automation (RPA), with which you can start to replace manual repeatable tasks with an automated process that’s faster and more accurate.

But, of course, these technologies will only function efficiently if they work from intelligent data. The [lower the data](https://www.financedigest.com/sterling-edges-lower-ahead-of-key-data.html "Sterling edges lower ahead of key data") quality, the more time you spend fixing errors, or dealing with exceptions, and the higher the operational inefficiency.

Everything, therefore, has to be underpinned by data that you can easily ingest, fully automate and control right across your financial, [commercial and operational](https://www.financedigest.com/iveco-to-transfer-nordic-retail-and-commercial-operations-to-hedin.html "Iveco to transfer Nordic retail and commercial operations to Hedin") systems. There is only one way to realistically achieve that level of data quality — and that’s via the cloud technologies underpinned by [machine learning](https://www.financedigest.com/machine-learning-engineer-jobs.html "Machine learning engineer jobs") processes.

### **The need for speed**

Traditionally, achieving an acceptable level of data quality would take a long time, with coded systems generally having lengthy implementation processes that in turn take longer to show results. This has a cyclical effect on the issue of data integrity, as by the time the coded system is fully up and running, technology has advanced or the business need has evolved, making the coded systems out of date or not fit for purpose. Now, however, new no-code cloud-based approaches allow firms to make significant [changes that can be scaled and adapted to meet the business need quickly](https://www.financedigest.com/seeking-right-tone-new-uk-pm-truss-had-to-quickly-change-gear-for-queen.html "Seeking right tone, new UK PM Truss had to quickly change gear for queen").

So to answer the question in the headline of this article — “can [banks compete in the digitisation race without effective](https://www.financedigest.com/how-effective-talent-management-could-disrupt-the-retail-banking-sector.html "HOW EFFECTIVE TALENT MANAGEMENT COULD DISRUPT THE RETAIL BANKING SECTOR") data integrity?” — the short answer is no. At least not in the long run. With [data integrity forming the foundation for all financial services, data integrity challenges significantly hold traditional banks](https://www.financedigest.com/open-data-represents-the-biggest-challenge-to-banks-in-a-generation.html "Open data represents the biggest challenge to banks in a generation") back from making the same technological advancements as big tech and digital-native competitors. As the [financial landscape’s reliance on digitisation](https://www.financedigest.com/make-way-for-the-rise-of-the-finance-super-apps-consolidation-of-financial-digitisation-tools-platforms.html "Make way for the rise of the Finance Super Apps – Consolidation of Financial Digitisation Tools & Platforms") increases, it’s only a matter of time before the issue of data integrity becomes front and centre for tech teams within the world’s biggest banks.


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