David Menninger's Analyst Perspectives

Using Event Data in Financial Services to Improve Business Processes

Posted by David Menninger on Nov 3, 2021 3:00:00 AM

Our research shows that nearly all financial service organizations (97%) consider it important to accelerate the flow of information and improve responsiveness. Even just a few years ago, capturing and evaluating this information quickly was much more challenging, but with the advent of streaming data technologies that capture and process large volumes of data in real time, financial service organizations can quickly turn events into valuable business outcomes in the form of new products and services or revenue.

Event data can be used to enhance existing processes, but it can also be used to dramatically impact operations, revenue models and the bottom line for financial service providers. Monitoring real-time events enable financial service providers to detect and prevent fraud before it is too late. Portfolio risk and compliance can be monitored and managed in real time. Event streams also create new possibilities in customer service operations and have raised expectations to include real time information from across the various channels of interaction including branches, online and contact centers.

Ventana_Research_Benchmark_Research_IoT_and_OI15_23_FinServ_Benefits_20211021 (1)Financial service providers report that the top benefits of event streams include detecting fraud and security violations as well as complying with regulations and managing risk. Organizations are also identifying opportunities for improvement in their operations and improving their financial results. While the top benefits focus on improving existing processes, event data has also been used to create new products and services such as electronic payments and online investment options.

But financial service providers must overcome some challenges to realize these benefits. The most common technical challenge, faced by more than one-third (36%) of organizations, is managing external event data. And nearly one-third (32%) report their event data is incomplete or that their event data sources are too numerous. Not all the challenges are technical, however. Financial service providers need to develop the skills of their people as well. One-third report a lack of resources (38%) and a lack of experience or awareness about event-stream processing (34%).

Ventana_Research_Benchmark_Research_IoT_and_OI15_33_FinServ_Tech_Challenges (1)Financial service providers can benefit from similar best practices as other industries. Not surprisingly, IT most often defines which events to monitor. They do a good job but involving externally facing groups, such as line of business personnel, customers and partners, is associated with better results. Customization will often be necessary in event-processing solutions, but those financial service providers relying heavily on custom-coded solutions are significantly less satisfied than others. Finally, financial service providers should find ways to automate more of their organizations’ processes. Less than one-half of organizations were linking automating outcomes based on event data, but those that did were more likely to be satisfied.

The event-stream processing market continues to evolve, and we will conduct ongoing research on this important segment. We encourage you to participate and provide your input.


David Menninger

Topics: Analytics, Internet of Things, Data, Digital Technology, Streaming Analytics

David Menninger

Written by David Menninger

David is responsible for the overall research direction of data, information and analytics technologies at Ventana Research covering major areas including Analytics, Big Data, Business Intelligence and Information Management along with the additional specific research categories including Information Applications, IT Performance Management, Location Intelligence, Operational Intelligence and IoT, and Data Science. David is also responsible for examining the role of cloud computing, collaboration and mobile technologies as they affect these areas. David brings to Ventana Research over twenty-five years of experience, through which he has marketed and brought to market some of the leading edge technologies for helping organizations analyze data to support a range of action-taking and decision-making processes. Prior to joining Ventana Research, David was the Head of Business Development & Strategy at Pivotal a division of EMC, VP of Marketing and Product Management at Vertica Systems, VP of Marketing and Product Management at Oracle, Applix, InforSense and IRI Software. David earned his MS in Business from Bentley University and a BS in Economics from University of Pennsylvania.