Financial services firms have found themselves the keepers of reams of valuable data in the midst of the Big Data revolution. While the collection of this data wasn’t entirely unplanned, its potential value far surpasses any expectations the collectors might have had. Hidden within that data are the secrets of how and why money moves. The winners in this shift will be the banks that can extract good information quickly and easily from their data and turn it into a benefit for themselves and their customers.
Banks and other financial institutions have affirmed the value of the data by continuing to collect and store it, but have yet to go much further in turning that data into some form of actionable information. Deriving the greatest value from this data is not an impossible endeavor, but it is a process that poses many challenges including regulatory issues, perception of privacy and security, and obtaining the people and resources necessary to extract meaning and relevance from the data.
Where the average person sees the day to day purchases of credit card data, retailers see the influencing factors that drive a person’s decisions.
Today, what customers see as deeply personal information, economists and bankers might see as an opportunity to understand how customers use banking services to better themselves and their families. Where the average person sees the day to day purchases of credit card data, retailers see the influencing factors that drive a person’s decisions. The best uses of this data will help financial institutions benefit both themselves and their customers. When banks implement Big Data initiatives, the biggest winners are the customers.
Big Data gives banks the ability to transform their approach to be completely customer-centric
- Customer Service Representatives are guided towards better recommendations
- Offers, rates, and terms can be tailored to each customer
- Loyalty programs can be completely automated
- Customers’ issues can be automatically identified and addressed before they switch banks
- Sentiment analysis identifies customers’ most pressing conversations
The more cynical among us might jump to the potential harms of combining Big Data analytics and often-vilified big banks. While it is true that by nature banks collect some of the most sensitive data an individual produces, this data is also uniquely valuable. The banks that succeed in the age of Big Data will be the ones who can leverage information to benefit the customers and identify what leads to bigger profits and happy customers.
Big Data for Banks: 5 Profitable Use Cases
Learn more about five profitable use cases of Big Data for banking and financial services.