Big Data Analytics Does Big Numbers for the Banking Business
Like many companies, financial institutions are scrambling to find a way to deal with the increasing mountains of data seemingly coming in from every angle. How do they store, process, and manage the flood of information streaming through on a daily basis? How are they to maximize its value? Big data has been identified as the answer to these questions and others surrounding the information explosion. Since they’re is still an air of mystery surrounding applications in this industry, we’re going to take a comprehensive look at how big data is being used in the financial sector.
Data-Driven Decision Making
In the simplest terms, big data arms companies with actionable insights that empower them to make smarter decisions. And in this particular field, the most powerful insights generally involve the telling consumer journey. Visits to the teller window inside the branch. Trips to the ATM outside. Transferring money between accounts online. These experiences are interactions the typical consumer doesn’t think twice about once their funds are dispersed and/or secured. For banks, they make for a potent fuel capable of driving everything from financial security strategies to personalized marketing campaigns.
Analytics in Fraud Prevention
In 2013, the number of U.S. fraud victims alarmingly topped 13 million. Data has been identified as a potent weapon financial security teams can wield to stop this costly crime in its tracks. Each transaction says a mouthful, so there is a lot to learn by analyzing these interactions and the data they produce. For instance, by tracking the user’s login geographical location, the device they logged in on, and the duration of the login process, financial systems can determine if fraud is at play, and freeze the account before too much damage is inflicted. They’re not always right, but it’s a case of better safe than sorry.
Insights for Sharper Marketing Effectiveness
As arguably the most powerful market in the world that happens to be driven by numbers, it’s not surprising to see that big data is making a global impact as far as the financial sector is concerned. Over the past ten years, OCBC Bank, the second largest bank in Singapore, invested more than $100 million in advanced analytics technology. In 2013, OCBC saw a 35 percent increase in wealth management product sales and $85 million in revenue. It attributes this success to the data that piloted the roughly 1600 marketing campaigns launched that year. The revenue and ROI potential in this industry is huge.
While the opportunities are plentiful and lucrative, entities in the financial realm are taking a cautious approach to big data analytics. This is sound strategy considering that diving in headfirst can have disastrous results. Even the most well funded organizations must understand both the opportunities and the challenges that await them before hitching a ride on this smoking hot bandwagon.