Big Data in Banking: Mining Opportunities from Challenges

by Edward O'Brien 0

Among banking leaders, there is a near unanimous acknowledgement of the transformative role that data will play in the success of digital banking by way of delivering competitive advantage and determining future winners. More importantly, a bank’s data and analytical capabilities will be central to staving off multiple challenges – such as data silos and lack of integration, both of which limit insight – facing traditional banking structures and models.

Banks trying to overcome their four biggest challenges, linked to customers, competition, fraud and compliance, will find many solutions in advanced data and analytics technologies.
Global retail banking experience levels have flat-lined [https://www.capgemini.com/thought-leadership/world-retail-banking-report-2015] over the past two years. Today, not only are customers less likely to purchase additional products from their primary bank, but they are also more likely to abandon them altogether. A hyper-personalized experience is increasingly becoming the metric of a bank’s performance.

For banks, the opportunity for personalizing to the ‘customer of one’ lies buried in the reams of data, both within and beyond enterprise boundaries. In fact, customers are even willing to provide more information, provided it leads to more personalization.

Banks and credit unions increased interest in mining data – both structured and unstructured data – continues to be a major theme for today’s financial institutions. And this movement is uncovering actionable information from this data, offering insight into ways to better understand and serve banking customers, and more specifically, the wants and needs of individual customers.

Overview by Ed O’Brien, Director, Banking Channels Advisory Service at Mercator Advisory Group

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