Leveraging insights within payments data offers financial organizations a distinct competitive advantage. However, the extraction of key data insights must be balanced with the compliance and security of consumers’ personal information.
In a recent PaymentsJournal webinar, “Cloud Compliance with Data Monetization – They Can Co-exist,” industry experts discussed the ways financial services companies are safely transforming their data assets into privacy compliant and statistically relevant synthetic data that can be migrated to a cloud environment.
The webinar featured guest speakers Tim Sloane, VP of Payments Innovation at Mercator Advisory Group, Chad Whitney, SVP of Data Partnerships at Facteus, and Matt Napoli, Business Development at Amazon Web Services (AWS).
Cloud computing is gaining traction in financial services
In May 2020, findings from a collaborative survey carried out by Efma and Finastra revealed that 54% of banking professionals have a cloud adoption strategy in place. This stands in stark contrast to the results of a survey conducted by Mercator Advisory Group in 2018, in which 20% of surveyed banking professionals reported having a cloud strategy in place. This difference is significant because it indicates that financial institutions are becoming increasingly aware of their need to embrace cloud technology.
“Our research and our conversations with banking members indicate that they have all come to embrace and understand the importance of cloud computing to their infrastructure. What that tells us in our research, especially around machine learning and the changes and impact machine learning can have across the institution, is that along with this embracing of the cloud comes the need for data to be able to support the machine learning solutions that are being deployed within financial institutions,” explained Sloane.
The need for that data to be secure cannot be overstated. “More and more financial institutions do have a cloud strategy and are looking for ways to move to the cloud,” agreed Whitney. “But I think one of the things that is imperative that we need to look at as they make this transformation is the security of the data that they’re putting in the cloud,” he cautioned.
Synthetic data offers authentic insights
Strict regulatory and compliance standards surrounding how consumer data can be used can make the move to the cloud a daunting prospect. “That’s where a lot of that hesitation or resistance comes in when you move to the cloud. Can we really put [consumers personal information] in a cloud environment that maybe we don’t completely own? Is risking compliance going to let us freely work with that data across our data ecosystem and our partners? And typically, the answer is no,” Whitney said.
A winning strategy that banks can deploy to solve this problem is the use of synthetic data. Synthetic data is data that has been synthesized and anonymized so that no personal information is used, while keeping relevant patterns and key data insights intact. Rather than potentially compromising a consumer’s personally identifiable information, companies can rely on synthetic data insights with information on how, where, and when consumers are spending their money.
To eliminate the need for banks to build and maintain in-house infrastructure for data storage, delivery, billing, and entitling, Amazon built its AWS Data Exchange solution. AWS Data Exchange makes it easy for organizations across a slew of verticals to find, subscribe to, and use third-party data in the cloud.
“We were hearing from consumers across all our verticals, so not just financial services by any means, but also media and telecom, healthcare and life sciences, that the process they had to go through to… ultimately use external data safely and securely in the cloud was just a huge pain,” explained Napoli.
Organizations that use AWS Data Exchange benefit from the ability to consolidate consumer data across multiple providers using a single API to securely monitor and share data internally.
Learn how to balance cloud compliance with data monetization
In the recent webinar hosted by PaymentsJournal, Sloane, Whitney, and Napoli discuss several additional aspects of balancing cloud compliance with data monetization using synthetic data, including:
- Trends of cloud adoption within financial services
- How synthetic data is being safely developed and generated
- Use cases for synthetic data (e.g., data analytics, machine learning, AI and product development, and data-sharing and monetization with external parties)
To access the complimentary webinar, “Cloud Compliance and Data Monetization – They Can Co-exist,” please fill out the form below.