With large amounts of information coming in from various sources, the banking industry is facing a new challenge to come up with new and innovative ways to manage and interpret Big Data.
If used wisely, Big Data can turn into actionable insights that have the potential to lead to better decisions that improve the company’s bottom line and help it leverage its top attributes.
“Data offers the intelligence to make sure what the client is being offered by the bank has value and relevance to their choices” Sam Kumar, Global Head of Analytics, Standard Chartered Bank.
Combining Big Data with high-level analytics, can provide immense benefits to financial institutions:
- Fraud Detection and Prevention
With the introduction of Big Data in the banking system, institutions can provide a high level of security, making sure that unauthorized transactions are detected promptly and stopped, and better yet, prevented altogether. Enhanced information protection and cyber security enable customers to make banking transactions that are faster, easier and safer.
Customer Segmentation & Customer Experience
With Big Data, financial institutions can dive into their customer’s spending habits and find new ways to serve them in a relevant and personal way giving real value to them. Banks can tailor their products to customer segments based on demographics, psychographics and actual spending patterns and personal preferences. In turn, this level of customization can create strong, meaningful client relationships and at the same time operational value quickly and accurately.
Big Data can do as much for risk management, as it does for fraud identification. While crisis management needs to be in place, Big Data can help banks with risk management and prevention, a less costly solution that leaves the organization’s reputation intact and the customers feeling safe.
The right message for the right person
Using Big Data Analytics can help banks find which channels their customers are using. This knowledge will help banks form a strategic advantage and efficiently reach specific target segments in the most cost effective, action-promoting way. According to McKinsey, using data to make better marketing decisions can increase marketing productivity by 15-20% – that’s as much as $200 billion given the average annual global marketing spend of $1 trillion per year. Last but not least, the ability of banks to leverage Big Data and analytics to create an individualized experience is particularly important to the millennial generation.