How to optimize the use of banking data. Pt. 2

The first part of this summary, published a few days ago, ended with a quote from our CTO and co-founder about what it's like to work in ‘the first division of finance’.

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Being a technology provider to some of the world’s most important banks has several implications, especially in terms of security. Óscar Barba and Juan Carlos López tell you all about it.

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Meeting the demands of major banks in real time: Optimize the use of banking data

Juanjo then asked our CTO to look further into this aspect. ‘Depending on what our client decides, we can build within their own architecture or with a SaaS-type installation, where they consume us as a cloud,’ he explained. The latter implies some challenges, derived from the immediacy of the response that entities such as Santander or EVO Banco demand from us.

‘Here we are talking about real time. It’s not enough: you send it to me and I’ll pass it on to you in a little while. Here we are talking about milliseconds. The customer clicks to know his global position and in that short interval of time he has to get an enriched response, where he can see the transactions with his logo, merchant’s name, website, location, associated carbon footprint and more.

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Data security at Coinscrap Finance and ISO 27001 certification

The constant threat posed by potential data breaches means that an extreme level of security is required to work with major banks globally. ‘The banking giants don’t just bring anyone into their house,’ said our co-founder. That is why Coinscrap Finance’s Information Security Management System has been certified according to ISO 27001 since 2022 and we perform constant tests to ensure data protection.

‘The number of transactions that take place every day on a digital level is incalculable,’ said Oscar. Thanks to the layering of information and multiple layers of security, sensitive information is shielded.

‘You have to bear in mind that banks, in order to certify our tools and allow us to integrate with their systems, even look at the colour of our socks’, he joked, “You can rest assured”.

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Enriched data allows us to create hyper-personalised banking solutions

Getting that enriched value data is what allows us to build our innovative solutions: ‘I always say it’s like a pyramid, first you categorise the data, you say if it’s an expense or an income, then you enrich it, adding the type and speciality’. 

What can we achieve with that? Well, the person who has children, for example, can get offers and promotions that are appropriate to the time of life they are in. The same goes for insurance; if a bank notices that a car insurance policy is about to expire, it can launch a promotion for the customer to change company. 

But it will only generate interest in the user if this communication reaches them in a timely manner.

Why do users need to understand their transactional information?

Juan Carlos took the opportunity to highlight the value of optimizing the use of banking data and its enrichment as a basis for managing personal finances in an optimal way: ‘If you have this general picture of your financial situation at the end of the month, you will know that you are spending 5% of your salary at McDonald’s, for example’, he said. 

Banks are also benefiting, creating automated financial advisors capable of analysing consumption habits, assessing recurring income and offering recommendations that are 100% tailored to each individual. Juanjo, as a marketing expert, highlighted the value of such detailed segmentation for any business strategy.

Tailor-made financial solutions for individuals and companies

Oscar gave a very visual example: ‘When an unexpected inheritance arrives, your own bank – which already knows you and is aware of your needs – can offer you a savings vehicle or an investment‘. The customer sees it as an opportunity and improves his perception of the bank, which behaves as an ally, maximising his profitability. 

Our CMO highlighted the importance of this type of communication for corporates as well. Solutions such as Business Financial Manager (BFM) can play a very important role in the financial health of SMEs and the self-employed, allowing them to anticipate taxes, identify invoices, manage payments and receipts and make cash control easier.

Our guests nodded in agreement and all three agreed that machine learning algorithms can find products that achieve the perfect fit with the user. 

How do they do it? Here’s what they reveal: 

Financial insights allow you to do segments of one in banking.

The next layer of enrichment is that which gives rise to financial insights, pieces of valuable information that are extracted from the transactional. Based on financial indicators, such as a user’s savings capacity, type of recurring expenses or level of risk, banks can obtain insights that help them increase up-selling and cross-selling opportunities.

Coinscrap Finance performs these financial calculations to provide banks with real-time, up-to-date metrics to optimize their use of banking data and improve their business strategy. ‘Knowing what a customer’s essential and non-essential expenses are allows the bank to offer the best credit,’ said Juan Carlos.

Optimizing risk scoring with constantly updated figures makes the difference for the financial sector. As Óscar told us, pre-approved loans are the order of the day in online banking, but banks prefer to offer them to customers who are in better financial health. Insights minimise risk because they show the user’s real situation.

Positive indicators allow users with good scores to enjoy lower interest rates or reduced insurance premiums. This is all thanks to the power of transactional data.

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Leveraging open banking and PSD2 to increase the customer base

Juanjo also wanted to comment that there is the possibility for banks to value the transaction of a person who is not yet a customer, through open banking technology and thanks to the European regulation on electronic payment services (PSD2), which allows access to the user’s banking transactions.

This technology also offers a huge advantage for the latter, as it allows them to shop on e-commerce platforms, receive digital payments or benefit from access to banking products with very advantageous conditions. It has also allowed non-financial companies and large technology companies to enter the financial sector.

Traditional institutions can take advantage of both to facilitate onboarding, democratise access to their services and guarantee the veracity of the documentation they receive. ‘It is a direct connection between the user and the bank, and that data is not corruptible because it comes directly from a 100% reliable source: the bank transaction,’ Óscar insisted.

The future of financial technology: artificial intelligence leads the way in data optimization

Juanjo then asked a question that has become a regular closing question in our Meets: ‘What do you think is going to be the technology that will change the financial industry in the next five years?’

Our Product Manager was the first to answer: ‘I’m sure of it, artificial intelligence is going to change the rules of the game in all aspects and even more so in the financial world’.

Juan Carlos López,
Chief Product Officer at Coinscrap Finance.

Óscar Barba, for his part, wanted to make it clear that ‘at Coinscrap Finance we have been committed to innovation for years, generating scientific papers on artificial intelligence in collaboration with a leading research group at the University of Vigo.

This allows us to stay one step ahead and anticipate the needs of the banking industry, to be able to offer disruptive tools. 

Óscar Barba Seara,
CTO and Co-founder at Coinscrap Finance.

The interaction between banks and users is changing thanks to technology and it is now possible to bring financial services closer to the population in a more natural and friendly way, as our special guests commented. Juanjo thanked them for their time and for all the information they shared with our audience and invited them to come back soon to LinkedIn Live.

I hope you enjoyed it as much as we did, see you next time!

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