Harnessing the power of Big Data in Finance
“Big Data” the thing most talked about in recent times is adding new dimensions to different organizations. It is basically a broad term for data sets which are large and so complex that the traditional data sets are incapable of handling it. The main challenges in big data include analysis, capture, data curation, search, sharing, storage, transfer, visualization and information policy. Every business organization (big or small) are trying reap the benefits of Big Data and the challenges together are termed as ‘Big Data Analytics’.
Some of the industries which generate a huge amount data are Banking and Finance. The implementation of Big Data has already begun in these industries and companies are investing a considerable amount of their resources in implementing Big Data.
The business of banking and financial management is flooded with transactions, conducting hundreds of millions daily, each adding another row to the industry’s immense and growing ocean of data. So, the question for many of these firms remains how to harvest and leverage this information to gain a competitive advantage?
The key areas where Big Data can play an important role using the financial data are as follows:
- Optimizing Customer Experience and Response across Channels: It is basically the continuous integration and analysis of the massive data which is being generated through transactions, channels, etc. for optimizing the customer experiences and responses.
- Boosting Enterprise Risk Management: It means supporting advanced financial data analysis and robust modelling by integrating financial risk and compliance data which would help in improving the risk visibility, reporting metrics and anti-fraud capabilities.
- Predicting Customer Behaviour: Analysing financial data and knowing which customers are most likely to switch banks. This is calls for targeted promotions and focuses resources on the people who drive the profits.
Example of how BIG DATA has been implemented in the finance industry:
- The Overseas Chinese Banking Corporation (OCBC) analysed historic customer data to determine individual customer preferences. It designed an event-based marketing strategy that focused on a large volume of coordinated, personalized marketing communications across multiple channels and touch points including email, call centres, branches, ATMs, direct mail, text messages and 3G mobile banking.
To date with these campaigns, OCBC has experienced a 45% increase in overall conversion rates and 60% increase in cross-sales.