How Banks Stand To Gain From Big Data

The financial sector has long capitalized on its access to proprietary data. They have been pioneers in digitalizing everything–every single transaction, purchase, ATM withdrawal, website click, and so on. This gives banks unlimited abilities to adapt to customers’ needs and theoretically allows identifying patterns characteristic of abuse or crime.

Banks have been aggressive in using data that pertains to other industries as well, such as real estate. This owes partially to their own records–assets like real estate, cars and other disappropriated things are meticulously recorded–and presumably data acquisition from third parties as well.

You could say that the very nature of the business, that is, dealing with numbers and keeping records throughout the years, has prepared banks for the Big Data revolution like no other business. On the flip side, though, banks are notoriously risk-averse and conservative so they are less likely to ‘believe the hype’ surrounding Big Data and cloud computing.

Personalized offers

Where other industries are forced to segment their customers based on information provided willingly, banks record every transaction so they know much better what services their customers are using. Besides, they have identity data for every customer. In short, they are better equipped than anyone to push genuinely personalized offers, ones based on the habits of the customer, than any other business out there.

However, this process is not as easy as on paper. Challenges exist not only in tapping into individual data and organizing it, but in streamlining the process so that banks can use it for millions of customers to drive profit margins up. This requires a hit-and-miss approach and refinement after each iteration, a process that banks are likely to detest not least due to pressure from investors or disheartened executives.

Security

Since the financial crisis, banks are being pushed much more to find internal mishaps or fraud as well as money laundering schemes. Whereas previously the focus was on parts of the data set, now the vast majority of transaction data can be used to identify suspicious activities, perhaps it can even be held in a single view. The stakes are high, and the banks’ IT departments have to overcome challenges not only in detecting increasingly smarter criminals, but also in complying with the new regulations in the process.

Those who are the most proactive in terms of utilizing their vast stores of data will also gain the most. There are many banks with sub-par customer service, even though they’ve had access to data that’s actionable no matter how you look at it. This signals either laziness or an IT crowd that’s less than prepared to match the challenges of this day and age.

By Lauris Veips

Tom Fanelli

Episode 9: Taking a Deep Dive into WordPress for Small and Medium Business

Deep Diving Into WordPress WordPress. For a lot of people this name might initially conjure up a place for amateur bloggers, almost a hobbyist site. But nothing could be further from the truth. As an ...
Eddie Segal

Kubernetes on AWS: Tips for Cloud-Native Development

Kubernetes AWS Tips Kubernetes is a container orchestration and management tool that automates container deployment. Kubernetes is mainly used in the cloud. A recent survey by CNCF showed that 83% of organizations deploy Kubernetes on ...
Martin Mendelsohn

How Will COVID-19 Impact Security Talent?

New Security Talent As we emerge from the era of COVID-19, unemployment will recede, and new jobs will be created more rapidly than jobs were lost between March and May of this year. We’re already ...
Alex Brisbourne

Industrial IoT Cyberattacks Continue To Rise

IoT Industrial Security The Internet of Things (IoT) includes both traditional electronics and everyday ‘things’ embedded with sensors, computing, and networking capabilities. From smart coffee makers and smart homes to smart lighting and smart cities, ...
Marcus Schmidt

What IT Leaders Should Know About Microsoft’s Operator Connect

Microsoft’s Operator Connect Earlier this year, Microsoft announced a new calling service for Microsoft Teams (Teams) users called Operator Connect. IT leaders justifiably want to know how Operator Connect is different from Microsoft’s existing PSTN ...
Jeremy Cioara

Demand for Cloud and AI Skills Continues To Increase

Demand for Cloud Skills Increases Thinking about adding more cloud skills to your repertoire? Stop thinking. The time to do it is now. For IT professionals, cloud computing skills are becoming an essential resume item.  ...