The growing evolution of digital services has kept traditional banking in a permanent state of adaptation in recent years. Triggered to a large extent by the technological acceleration caused by the pandemic, it has brought new challenges and developments to alternative mobile data.
Improving scoring and analysis processes, strengthening cybersecurity, emphasizing transactional processes, and automating profiles for financial inclusion seem to be some of the challenges that banking has on the horizon, considering the new needs of digital customers by strengthening customer service and interaction.
According to Latinia, financial notification software, the future of banking is unthinkable without the development of tools that work with artificial intelligence. In that sense, they claim that Latin America is in a good position regarding the implementation of solutions that include the use of alternative mobile data. They also caution that emphasis should be placed on promoting personalized profile analytics, with the aim of providing the customer with the best credit coupled with the least amount of risk for the financial institution.
Gabriel Olvera, Sales Manager for Risk Management Solutions at Tiaxa, who gained more than 13 years of experience serving the banking sector as part of the Credit Bureau, observes that the financial environment is becoming increasingly competitive with the emergence of Fintechs and other actors that did not exist in the market before and that have added a significant number of members to the financial sector.
In addition, he states that one of the greatest challenges is looking for other sources of information, and that is where alternative mobile data plays a fundamental role;
“It is clear to us that the basic purpose of any financial institution is doing business, so the use of conventional information gets you closer to or furthers your knowledge about a particular market segment; but now, to stay current and continue to grow, you have to turn to new segments, to new business configurations and in this sense, alternative data broadens that horizon for you,” opines Olvera.
“Today, Fintechs are born that seek to promote financial inclusion, that is, add more users to the market. Traditional banking is also turning to those segments because it is beneficial for the business, and to serve them, but it does not necessarily have adequate information. That is where we look for alternative sources of data that allow the broadening of perspective. It becomes an essential part when we talk about growth and development for the future. Today, there are more options for new information sources, not only those that we offer through mobile operators. As I see it, we are in a race to find new data sources and that’s where the challenge lies; understanding them, developing them and putting them to use”, he adds.
Regarding projections for the banking sector related to the use of alternative mobile data, Olvera assures us that in the given context, cybersecurity is the area that may present the greatest challenges. The Payments Cards and Mobile portal claims that globally, some 37 billion registrations were compromised during 2020, which represents around 10% of the world’s online population, so efforts should be accentuated on this issue, Olvera comments;
“In the field of online transaction fraud the case for using alternative data is much clearer, as, given the global situation we are experiencing, it is necessary to integrate it, especially for digital media. Likewise, it is essential to safeguard this information, taking into account the large number of users who carry out banking operations through mobile devices”
As for improving analytical models and the challenges in the use of alternative mobile data in these processes, Olvera points to the contribution they have made to date and that he sees in the development of client businesses;
“We have to approach the task of improving the analysis of data together with our clients; we, as data providers, follow the market that is setting the standards in the ways we can apply the information. The use of alternative data still requires more analysis and development due to the nascent stage of its use in the market. We are already seeing success stories that prove that the information is useful for risk management, for the identification of new segments in credit decisioning, for the organization of portfolios etc. This provides information that allows a financial institution to better understand and classify its clients”, Olvera concludes.
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