What Is A Bank’s Most Important Asset today ?

What would you say is the most important asset that a bank or a financial institution or for that matter any company providing services to a customer possess today ? You could say money and other financial assets. After all, the largest and the most well known banks have the largest capital or assets under management. But the reality is that financial assets – capital, funds, investments, deposits etc can be replaced.

You could argue that people, that is the employees, of the bank are its most important assets. After all, it is the employees of the bank that drive its operations, customer service, trading and other revenue generating activities. It is these things, especially customer service, that differentiate one bank from another and the banks that have the best employees tend to be the best performing ones. You would be right to a very large extent.

Except that, employees can be replaced, though the best performing and most productive ones are probably harder to do so. Unless something catastrophic happened and you were to lose all your employees in one fell swoop. In such a situation, sadly but not surprisingly, the chances of your organisation surviving as a viable business would be slim in any case.

Similar arguments could be made about the technology infrastructure, software solutions, products and services, offices et al. All of these elements of a bank are important for its functioning and any deficiency, or an absence for that matter, would of course render a bank unviable in this day and age.

But the one asset I am referring to is, of course, none of the above. Instead, we are interested in the customers of a bank, or a financial institution or a service provider. It is the customers of any company that  determine its future. Certainly, for a bank too, its customers are, or should be, its most important asset. Check the website, annual reports or any other relevant literature of any popular bank or financial institution and phrases like customer centricity, customer focus, etc will surely abound.

So if customers are the most important asset of any bank, its stands to reason that the data about customers is surely the important information that the banks would possess. You would expect this single most critical asset to be handled as well and as carefully as possible. It would be reasonable to expect this data would be kept as securely, up to date, relevant and complete as possible.

Surely, banks would make sure this data was reviewed periodically, mistakes corrected and the data analysed deeply to  understand the likes and dislikes of the customers and get a better insight into their needs and requirements. Steps would be taken to make sure that the data was compliant with the necessary internal and external governance and compliance requirements and risk regimes.

In reality, banks and financial institutions are facing significant challenges in managing customer data.

  1. Banks are losing customer data to the hackers
  2. Banks are losing customer data due to carelessness
  3. Banks are losing customer data because of malicious insiders, who profit from selling this data

So, banks are losing customer data. Period.

Author: admin

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