Big data in the banking sector
Regulators are demanding greater transparency, customers want a more relevant and personalized experience, and CEOs are looking for sustainable growth opportunities. A common thread in all of these issues is data. Big data. What is big data? Forrester puts it succinctly in saying “big data encompasses techniques and technologies that make capturing value from data at an extreme scale economical”.
Big data is all about liberating information from variable sources and formats, which is large in volume and broad in variety, in order to become more efficient and gain valuable insight to maximize opportunities. The keyword is ‘value’.
Technology silos and ever-expanding amounts of data make effective data management a massive challenge. Banks have an abundance of data, but few are able to know their customers (KYC) by analyzing that data. For some banks their survival depends on it, for others that can indeed capture value, it extends their capabilities to a more sophisticated level of risk management, marketing optimization, and sales efficiency, which in turn gives them an advantage over their competitors.
Deriving value from big data
Banks need to move from analysis to action. Technology can help banks in their quest to derive genuine strategic insight from big data, and ultimately unlock its true potential. However, big data includes structured, semi-structured, and unstructured data, and not all data is equal in terms of its value or meaning, or how it should be managed. Banks that master this can become leaders in customer service, take steps towards sustainable growth and respond more rapidly to compliance and regulatory demands.
Big data initiatives are likely to grow within the banking sector, as they seek better, more cost-effective ways to derive meaning from big data. While some banks are primed for success and will utilize data to develop more sophisticated analytical tools, those who are left behind are very likely to miss valuable insights about their customers, and ultimately lose revenue. Big data is truly a game-changer in the banking sector.
What are your thoughts on big data in the banking sector? What is your experience with big data? Feel free to share and add your comments below.