Data is now the most valuable resource on the planet, and more of it is being created daily. Tech Jury mentions that over 2.5 quintillion bytes of data are created daily. However, when we examine all the areas and industries that produce this data, it becomes less impressive. Of course, we’ll see this much data being made daily because we use technology in every aspect of our daily lives. Big Data is an emerging technology that can take these incomprehensible swathes of raw numbers and figures and develop real, actionable insights out of it. One of the industries that seem to be looking at its potential for increasing returns is the banking and finance industry.
No Stranger to Data
Banking and finance is a field rooted deep in the tradition of numbers, making their dependence on data a second nature. However, Big Data isn’t the typical type of numbers and figures the industry deals with. Instead of locating the value for potential returns from a forex broker, banks can use Big Data to develop areas they traditionally have a lot of problems with, such as:
Happiness within a job plays a significant role in whether the professional stays with a company or not. Harvard Business Review mentions that employees stick around in a company because they feel that the job engages them, and they think necessary. Learning what employees are engaged by helps the institution develop better ways of keeping their employees happy. In the financial sector, skilled, experienced workers are already challenging to find, and knowing what can convince them to stay with a business may be worth its weight in gold.
Big Data can aid here by offering businesses unique insights into their employee behaviors, including businesses such as Legacy Countertops. While many companies already use questionnaires to determine employee satisfaction, these methods are outdated and rely on secondhand information. Instead, data mining of employee behaviors can collect data that can uncover hidden insights. There may be things that employees don’t even know about themselves that Big Data may be able to show up. These insights can be priceless in keeping skilled employees with the firm for longer.
Modern financial institutions already utilize analytics and predictive algorithms to help them perform their jobs. However, these risk models have their own flaws that are part of their development. When initially developed, these systems of insight didn’t benefit from thousands of data points to verify their success. However, with the introduction of Big Data, banks, and other financial institutions now have a method for improving these predictive methods. These models are primarily used in risk management for their organizations and may show up in areas of analysis, including:
Ø Integrated Risk Management
Ø Operational Risks
Ø Market and Commercial Loans
Ø Credit Management
Ø Fraud Management
Big Data can refine the signals that financial institutions use to detect fraud in transactions or transfers. With so many transactions passing through institutions every hour, it would be impossible for a human to spot the patterns necessary to ascertain whether fraud is likely to take place. However, automated algorithms can spot these patterns quickly and effectively. When coupled with other emerging technology such as machine learning, the system will get more effective at spotting fraud with each new iteration.
Banks and financial institutions have always had a bit of a hard time coming to grips with customer experience. However, with so much choice in today’s marketplace, customer interaction is among the first things that new consumers to the institution examine. Customers value individual interaction, but with the number of consumers banks have to deal with, this isn’t always possible. For a financial organization to deliver a good customer experience, it needs better insights into their behaviors and attitudes.
Luckily, Big Data can rescue these organizations by offering them a 360-degree view of the customer. From personal details to transaction information, each tidbit of data can help to shape how the institution sees its consumers. These insights can develop individual approaches to dealing with customers, allowing for a more personalized banking approach. It’s this personalization that most consumers today value from any business they deal with.
Looking At Data’s Impact On the Future of Banking
Big Data is a powerful method of developing insights and improving operations within a financial organization. It offers banks a familiar interface to deal with something they usually don’t know how to interact with – individuality. Whether its employees within the institution or the business’s consumers, each of these have a story to tell that raw numbers don’t do justice. However, with the robust analytics engines fueled by artificial intelligence, banks may yet be able to understand how their human interactions should work. Whether it continues to be successful in the future, only time will tell.