When Tension Meets Technology: How Banks Are Finally Striking Gold With Customer Data

By Amir Tabakovic

Originally published on the Mobey Forum blog.

Digital innovations like cloud technology and artificial intelligence promised to help banks compete against fintechs and meet customer expectations. These solutions would enable predictive applications, break down data silos, and democratize analytical capabilities across organizations.

However, success requires modern infrastructure. Traditional systems cannot match the data-driven decision-making approaches already employed by competitors.

Customer data presents a dual nature — nurturing relationships when handled properly, but creating catastrophic risks when mismanaged. Data breaches, regulatory violations, and fines can undermine years of accumulated customer trust.

Banks face mounting tension between commercial and compliance forces. Business teams push for rapid data accessibility and cloud migration to enhance analytics. Simultaneously, information security and data protection departments enforce strict controls to prevent privacy violations. This creates frustration on both sides: commercial teams feel constrained, while the guardians of data protection worry about unidentified risks emerging later.

The industry recognizes an opportunity within this challenge. Banks worldwide collaborate with startups, academic institutions, and privacy-technology providers to develop Privacy Enhancing Technologies (PETs) — emerging solutions that reduce privacy risks without requiring third-party trust.

Properly implemented, PETs enable digital transformation while maintaining regulatory compliance and customer confidence. These technologies help banks identify previously unknown privacy vulnerabilities in existing processes.

The Mobey Forum established an AI & Data Privacy Expert Group to investigate these technologies and the strategic options around them. Their first report examined secure multiparty computation, synthetic data generation, and homomorphic encryption. Members subsequently explored combining PETs into hybrid analytical value chains.

2022 represents a pivotal year for PET adoption. The expert group is releasing a report series examining each technology in detail, helping organizations understand these emerging solutions to support informed evaluation.

This moment offers genuine potential for successful AI and cloud implementation despite existing constraints.