Across industries, organizations are collecting and using large sets of data to get a leg up on the competition. One industry that has been particularly aggressive at harnessing the power of data is the banking business.
And it’s no wonder. In 2009, the McKinsey Global Institute estimated that U.S. banks and capital markets firms collectively had more than one exabyte of stored data. And, according to IDC Financial Insights, the volume of digital content is expected to increase this year from last by 48 percent.
We’ve covered how banks are using technology to retain customers and protect their customer data, and now more than 40 percent of banks will boost their strategies for Big Data, analytics and data collection, according to IDC.
So, what kind of data is being collected? Believe it or not, banks are working to figure out how to store and mine videos, images, news and social media data to draw out accurate customer profiles.
Accurate profiles help banks improve customer experience and retention. The more banks know about customers, the more they can tailor solutions to meet customer needs. Mining data “tells us what the customer wants, not what we think they want,” says James Gifas, U.S. head of global transaction services for RBS Citizens. Analyzing customer data also allows banks to spot any potential customer problems, improve management of customer accounts, engage in real-time dialogue with customers, and improve overall customer experience online and over the phone.
On the flip side, harnessing Big Data also helps banks to identify and contain fraud and to comply with money-laundering rules and sanctions.
With all this data, there are bound to be some challenges associated. The following are the most common challenges reported by banking IT:
- Data is usually stored in multiple sites, and it is often difficult to access for data analysis.
- Keeping up with storage systems that don’t scale to the capacity banks need.
To manage Big Data the right way, banking and credit institutions have the opportunity to use existing infrastructure to centralize data, increase efficiencies and maximize capacity. The time is ripe for capitalizing the power of Big Data. And banks are at the forefront.
What other ways can banks utilize the power of Big Data to gain a competitive edge?