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Most Power to Data After ISO 20022 Transformation

May 8, 2024

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ISO 20022 Propels Payment Data Monetization

ISO 20022 facilitates banks, credit unions, payment enablers, and other FIs to unlock the potential of data. Read on to learn how.

In the rapidly expanding digital financial landscape, data science has become a cornerstone of innovation and efficiency, driving decisions that benefit both the customer and the financial institution (FI). However, the growing emphasis on data privacy and the value of the data collected raise critical security concerns. Simultaneously, ISO 20022 introduces new complexities in data management and the development of data strategies. FIs worldwide must adopt comprehensive data platforms that empower them to strategically consolidate and monetize data from diverse channels while ensuring regulatory compliance.

ISO 20022 Transformation Will Revolutionize Data Monetization

As the clock ticks toward the compliance deadline for the global payment messaging standard, FIs must grasp the changes the standard introduces to messaging formats and their advantages to optimize the value generated from the data.

ISO 20022 provides access to richer and better-structured data during the payment process. In addition, it improves the data model to facilitate the drawing of deeper insights and extracting greater value from payment and reconciliation data. The improved data model enhances the training of ML models, increasing the accuracy of insights drawn from the data.

Through increased granularity, greater detail, and enhanced transparency, the standard creates a new use case for data monetization:

Data is the Mightiest of All

Data holds great power and FinTechs across the world. It has the potential to drive innovation and personalization, helping FIs bring unique products and services to the market, ahead of the competition. Here’s a look at how datafication helps can help the finance sector.

Multiplies the Opportunities for Revenue Generation

In the age of intensifying competition from emerging data-first participants in the financial market, tactical technology implementation, comprehensive testing, and advanced analytics can facilitate product and process improvements. Refining existing products and developing newer ones with data-based insights can enhance revenues for FIs by helping them stay on top of customer pain points and market expectations. Process improvements enable FIs to incrementally improve performance, quality, and productivity, providing a competitive edge by improving cost and resource efficiency.

Drives Hyper-personalization

Since the days of one-size-fits-all are long gone, pleasing customers requires hyper-personalized solutions at warp speed. Plus, the largest customer populations are made up of millennials and Gen-Zers, who expect instant gratification. They desire data-rich, expedited reconciliation, real-time payments, and automated transactions around invoices. They seek personalized financial advice, and tailored products and services. To meet their demands, FIs must ensure superior data processing capabilities. This will also enable the provision of frictionless and unified multi-channel user experiences.

Facilitates Combating Financial Crime

With the growing importance of data, the need to ensure the highest security standards becomes paramount. AI-powered analytics help FIs monitor customer behavior, transaction volumes, and network performance. This helps them discover and prevent threats to data privacy and operations. Real-time analytics facilitate the detection of fraudulent or suspicious activities, behavioral anomalies, and regulatory breaches faster. Additionally, FIs can respond to incidents faster, before they can cause damage. FIs can, thus, prevent or at least minimize financial loss while maintaining customer trust and their reputation.

Gives Insights into the Future

Data powers prescriptive and predictive analytics, which in turn helps FIs discover market trends and foresee changes in the financial needs of their customers. This gives them the opportunity to prepare for and meet customer expectations ahead of time, establishing leadership in the extremely competitive FinTech space.

The Way Forward

The BFSI sector is a key driver of advancements in the data-driven analytics industry. This means that data-led FinTech growth and the maturation of data monetization technologies form a complementary pair. ISO 20022 fosters connectivity and synergies across the financial ecosystem. It cuts across diverse financial domains, such as banking, trading, liquidity management, lending, financial crime management, and customer segmentation. This facilitates the creation of better services and products to meet the dynamic needs of today’s tech-savvy customer.

The three pillars of FinTech datafication are superior data governance, big data analytics, and top-notch security and compliance. Data monetization is pervasive and transformative for the FinTech industry. However, certain challenges continue to plague the sector due to legacy infrastructure and inadequate data policies. This is where an experienced datafication and data-monetization expert comes to the rescue. They enable strategic data monetization by facilitating:

  • Dataset enhancement through strategy extraction, organization, model -training, and analytics.
  • Drive data lake storage enhancements to expedite the adoption of the ISO 20022 standard.
  • Develop integrated retrieval, visualization, and reporting models to support monitoring and analytics.
  • Upgrading existing data models and infrastructure to revise process manuals for payments, reconciliation, and internal training.
  • Implement new analytics engine to consume the novel data models while supporting legacy models to provide detailed analyses using real-time, pre-ISO 20022, and post-standardization data.

With 26+ years of experience in the payment digitalization and modernization space, Opus Technologies enables financial institutions to extract greater value from data. Being at the forefront of the payments ecosystem, the Opus experts are adept at evolving data strategies and models according to the dynamic and increasingly unifying financial ecosystem. Talk to our experts to discover how your financial organization can benefit from timely ISO 20022 adoption through strategies that ensure transition with minimal disruptions to operations.

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