• Follow us

Internet

Banking on big data

Despite the dislike of the term by some, the importance of Big Data continues to grow and with it, its potential for benefitting the retail banking industry. As with other industries, many banking services and insurance organisations are working to adopt a fully data-driven approach to grow their businesses and enhance the services they provide to customers. Some are already ahead of the curve, others are lagging behind, at varying levels of Big Data maturity.

Whilst data collection has long been vital to the retail banking sector, the amount of data being collected continues to grow exponentially. However, more does not necessarily mean better and some banks are still working with legacy systems, leaving them struggling to keep pace with changing customer dynamics and the digital landscape. Big Data is most often defined by the ‘3 Vs’ of Volume, the actual amount of data growing, Velocity, the fact more and more data is in real-time and Variety, reflecting the changing structure and kinds of data. Handling Big Data is not just about having more, it’s about being able to get the right data from within the gathering storm of data and then, putting it to use.

Today’s consumer enjoys the freedom of using mobile internet and smart devices and interacts on social media, as well as a range of other digital apps, anywhere, anytime. Thanks to the application of data analytics, customers have come to expect content and offers tailored to their own interests and shopping and browsing habits, usually delivered to them in real-time.

Accustomed to receiving relevant insights and offers at the right moment in other areas of their lives, customers now expect the same experience from their banks. Due to the nature of the business, banking services are unlikely to elicit the same warm, engaged feelings from customers as, for example, their favourite retail brands. However, there must still be a real and relevant connection between bank and customer. This is where Big Data analytics need to be employed. Not capitalising on the growing amount of data over time has left some banks little connection with, and limited understanding of, their customers. In turn, this naturally limits their ability to tailor products and services and create content that resonates with those customers.

In today's competitive environment, customers are not only more informed and accustomed to receiving such content, but switching banks is also easier than ever before, sometimes with clear monetary incentives. The combination of these factors makes it imperative for banks to form relationships with those customers as individuals in order to retain them.

Value of analytics

In fact, the number of current account holders switching bank or building society reached a two-year high last year according to payments body Bacs. During the first three months of 2018, more than 273,000 switches were recorded, a 10 per cent increase on the same period in 2017. As competition grows increasingly fierce, banks must be able to understand customer preferences and motivation and create a seamless experience that anticipates their expectations in advance.

With growing switching, the opportunity is significant for challenger banks as well as the large, established banks. A perennial truth of business is ‘know your customer’. Large or small, the ability to know your customer, and prospects, is fundamental to serving relevant marketing and great customer experiences. You just can’t have those outcomes without it. For the growing challenger market, there’s a great opportunity to not be restricted by large legacy systems and to design a unified data layer, across the right data and technology to put the customer first. In some ways, just starting out puts the challengers at an advantage despite the disadvantage of scale.

An additional benefit of this data-driven customer interaction is that attrition and loyalty can also be measured. This is important because analytics measuring attrition can also help identify when and why customers are switching. This can then enable retail banks to target specific content to those who are considering a move.

Alongside driving retention, Big Data can also be applied to answering unmet customer needs, cross-selling potentially useful products to existing customers by analysing their spending potential and identifying what they might need. This more precise and softer selling is particularly relevant in the post PPI landscape which generated huge distrust in the hard sell.

Data collection and security have, for good reason, historically been priorities for banks. However, most analytics, strategies and efforts have focused on regulatory requirements, rather than value creation. There are many areas where analytics can provide rich insights and bring value to processes and operations. These range from facilitating improved fraud management, credit management and risk management to mitigating operational risks and losses. Historically fraud detection was previously based on customer spending patterns, now analytics is integrating complete customer profiles to detect fraud. Additionally, predictive analytics can be used to look at triggers that may affect credit exposures.

From delivering a better customer experience, through more relevant marketing, to channel spend optimisation and fraud prevention, such is the value of analytics that, according to a 2016 report by SAS and the Centre for Economics and Business Research, the value of Big Data could be worth £322bn to the UK economy by 2020 and retail banking is forecast to be one of the sectors that will experience most economic benefit – estimated at more than £16bn.

Looking to the future, the desire for analytics to support and drive the retail banking sector forward is only ever going to increase. The important ‘watch out’ is that the increasing volume, velocity and variety of data, will be of limited benefit sitting in silos. All banks, indeed, all businesses require strategies to create a Unified Data Layer, to realise the potential of their data, to know their customers and to earn success as their reward.

Lisa Andreou, Sales Director, UK, AcxiomImage Credit: Everything Possible / Shutterstock

Read More



Leave A Comment

More News

Latest ITProPortal news

Best web hosting services for 2019 New! 2019-05-22 14:45:26If you are confused about website hosting, then this is the place to start your search

What is Big Data? Everything you need to New! 2019-05-22 09:20:51Big Data: What’s New  10/05 - FEATURE - Lisa Andreou/Acxiom - Banking on big data - The importance of big data keeps growing, but how can r

EE reveals launch of UK 5G for businesses New! 2019-05-22 08:00:40Six cities, five devices and multiple plans for starters.

Nokia CEO says Huawei ban could help its New! 2019-05-22 07:30:37Block on Huawei tech could be good for its rivals and former partners.

Tech is playing a key role in building New! 2019-05-22 07:00:40Most companies aren't ready for the workplace of the future.

From the Nigerian prince to London Blue – New! 2019-05-22 07:00:27Agari recently conducted a deep research campaign into a particularly prolific Nigerian gang we have dubbed London Blue.

Ransomware vs. SMBs – who will prevail in New! 2019-05-22 06:30:14What are the key steps SMBs should go through to increase their cybersecurity with regards to ransomware?

Kaspersky warns of major rise in DDoS attacks New! 2019-05-22 06:30:11Hour-long DDoS attacks have surged almost 500 per cent.

How FinOps can help you manage your cloud New! 2019-05-22 06:00:54IT Pro Portal Q&A with J.R Storment, Co-Founder, Cloudability.

Three key takeaways from the 2019 Verizon Data New! 2019-05-22 06:00:51XMCyber's Menachem Shafran helps you take advantage of the 2019 Verizon Data Breach Investigations Report.

Microsoft calls for a US GDPR New! 2019-05-22 06:00:20Tech giant promotes need for federal data legislation.

Disruptive leadership in the era of digital transformation New! 2019-05-22 05:30:28If you’re not experimenting, you’re falling behind.

TechRadar: Internet news

The best 2-in-1 laptop 2019: find the best 2019-05-21 18:58:42Alongside the impressive HP Spectre x360 15T (2019), these are the best 2-in-1 laptops around.

Vizio’s budget V-Series will offer 4K and Dolby 2019-05-21 18:17:56Vizio’s stacked 2019 TV lineup includes a 3,000-nit TV and several ultra-budget Dolby Vision screens.

Apple now accepts 2018 MacBooks into its keyboard 2019-05-21 18:15:13Apple has expanded its keyboard repair program to cover all MacBooks with Butterfly keyboards.

Digital transformation could be causing security risk 2019-05-21 17:50:32A new report from Thales and IDC has shed light on a growing security gap among European businesses.

Google Pixelbook 2: what we want to see 2019-05-21 17:40:10Here’s everything we want to see from the Google Pixelbook 2

The best student laptops: all the best options 2019-05-21 17:07:31The best laptops for college students – everything from Chromebooks to the new Dell XPS 13.

Sharks vs Blues NHL live stream: how to 2019-05-21 17:03:33Who will get a shot at the Stanley Cup? We’ll show you how to live stream the NHL San Jose Sharks vs St. Louis Blues action from anywhere.

Why you should care about the 2019 VW 2019-05-21 16:04:13Far from taking control out of your hands, smart optimization could make tomorrow's cars a joy to drive.

DDoS attacks soar after long period of decline 2019-05-21 15:33:47New research from Kaspersky Lab has revealed that new DdoS-for-Hire websites have reignited cybercriminals' interest in DDoS attacks.

Honor 20 vs Honor 10 2019-05-21 15:26:42The Honor 20 is the brand's latest affordable flagship, but how different is it really to the Honor 10?

Huawei Android ban: Time for Honor to rise 2019-05-21 15:02:51Honor might be Huawei's secret weapon

Opera jumps into gaming with Opera GX browser 2019-05-21 14:59:15Opera has announced an upcoming 'gaming' browser called Opera GX, but specified no features.

TechCrunch » Enterprise

Robin picks up $20 million Series B to 2019-05-20 08:37:24Robin Powered, a startup looking to help offices run better, has today announced the close of a $20 million Series B funding. The round was led by Tol

Wagestream closes $51M Series A to plug the 2019-05-20 08:35:08Getting your work wages on a monthly (not weekly nor biweekly) basis has become a more widespread trend as the price of running payrolls has gone up,

Under the hood on Zoom’s IPO, with founder 2019-05-17 14:00:22Extra Crunch offers members the opportunity to tune into conference calls led and moderated by the TechCrunch writers you read every day. This week, T

HPE is buying Cray for $1.3 billion 2019-05-17 09:50:35HPE announced it was buying Cray for $1.3 billion, giving it access to the company’s high-performance computing portfolio, and perhaps a foothol

Health at Scale lands $16M Series A to 2019-05-17 09:00:53Health at Scale, a startup with founders who have both medical and engineering expertise, wants to bring machine learning to bear on healthcare treatm

Unveiling its latest cohort, Alchemist announces $4 million 2019-05-16 11:30:08The enterprise software and services-focused accelerator Alchemist has raised $4 million in fresh financing from investors BASF and the Qatar Developm

SugarCRM moves into marketing automation with Salesfusion acquisition 2019-05-16 10:06:35SugarCRM announced today that it has acquired Atlanta-based Salesfusion to help build out the marketing automation side of its business. The deal clos

OpenFin raises $17 million for its OS for 2019-05-16 09:01:51OpenFin, the company looking to provide the operating system for the financial services industry, has raised $17 million in funding through a Series C

VMware acquires Bitnami to deliver packaged applications anywhere 2019-05-15 12:52:01VMware announced today that it’s acquiring Bitnami, the package application company that was a member of the Y Combinator Winter 2013 class. The

Tealium, a big data platform for structuring disparate 2019-05-15 11:11:57The average enterprise today uses about 90 different software packages, with between 30-40 of them touching customers directly or indirectly. The data

Solo.io wants to bring order to service meshes 2019-05-15 11:05:07As containers and microservices have proliferated, a new kind of tool called the service mesh has developed to help manage and understand interactions

Egnyte brings native G Suite file support to 2019-05-15 09:10:55Egnyte announced today that customers can now store G Suite files inside its storage, security and governance platform. This builds on the support the


Disclaimer and Notice:WorldProNews.com is not responsible of these news or any information published on this website.