In today’s financial services world, everyone’s talking about AI, and for good reason. It promises smarter risk models, personalized experiences, and predictive analytics that could revolutionize how services are delivered. However, there’s a hard truth that AI can’t fix: the foundation of data it relies on. If the customer data isn’t trustworthy, AI will fall short of its potential.
The Rising Customer Experience Bar
The customer expectations in financial services have shifted, particularly with the rise of fintech companies. Millennials are increasingly moving toward mobile-first and fintech solutions. According to Trimco Group, 56% of millennials now have a fintech checking or savings account, with 89% of customers across all generations using mobile banking.
Consumers expect personalized experiences, with 70% expecting personalized advice from their banks, according to Zalando Partner. Financial institutions must keep up with these expectations by evolving their customer experiences. However, banks are constrained by siloed legacy infrastructures that prevent them from fully leveraging the potential of digital transformation.
The Fragmentation Problem
Despite the rapid rise in AI projects, many financial institutions still operate with disconnected systems and shadow databases. According to a Stibo Systems study, 76% of organizations rely on shadow databases to reconcile customer information, and 60% of teams spend over six hours each week cleaning data. This fragmentation leads to errors and inefficiencies, hindering effective decision-making.
For an industry built on precision, this fragmentation is problematic. Data in different systems doesn’t communicate, making it hard to maintain an accurate, up-to-date view of each customer. A single duplicate record can lead to issues like delayed onboarding, compliance risks, or an inaccurate customer profile.
Governance: The Missing Link Between Compliance and Growth
Historically, financial services have viewed data governance mainly as a compliance task. However, it’s increasingly seen as a growth strategy. Stibo Systems found that 57% of institutions admit they lack formal governance policies, resulting in inconsistent views of customers across various systems. Without proper governance, data becomes noise, hindering decision-making and eroding trust.
Effective data governance ensures clarity and consistency, allowing institutions to move beyond basic compliance to make smarter, data-driven decisions that foster growth.
AI is Only as Good as the Data You Feed It
AI-driven products and services are a top goal for 2025. However, nearly 28% of leaders struggle to adopt AI because their customer data isn’t ready. Without trustworthy data, AI tools won’t deliver on their promises. Too often, AI solutions over-promise and under-deliver because they are fed inaccurate or incomplete data.
The success of AI hinges on the quality of the data input. Financial institutions must prioritize data quality to fully leverage AI’s potential and achieve their goals.
The Untapped Advantage Hidden in Customer Data
The good news is that financial institutions already possess the raw materials for innovation. The key is unlocking that potential by connecting disparate data sources. When customer and other relevant data are integrated, new opportunities emerge: cross-selling becomes easier, fraud detection sharpens, and marketing becomes more personalized.
By investing in customer data management, financial institutions can create context around the insights gathered. This leads to benefits such as revenue growth through cross-selling, improved customer retention, operational efficiencies, cost reductions, and enhanced risk management capabilities.
The Bottom Line
The financial services industry has always been about relationships. In the AI era, those relationships are built on trustworthy customer data. The businesses that can confidently use their data to drive smarter decisions will have the competitive edge. Investing in reliable customer data isn’t just a necessity; it’s a strategic advantage that can drive long-term growth and success.