Big Data in Finance: 3 Banks That Get It
Today’s business world is constantly changing, and nowhere is this more apparent than in the area of information management.
The rapid advances in technology and the explosion in computer and cellphone use have produced literally tons of information. This information, known as big data, contains valuable and useful facts about what, when and how people use products and services, and businesses across all industries and countries are eager to harness it.
Efficient bank growth
The use of big data in finance gives banks many avenues for driving growth. Analyzing different data sets may identify profitable existing customers, predict which products or service lines to expand and even give direction to new marketing campaigns.
Structured data includes items such as times, types and locations of transactions. Large amounts of unstructured data regarding customer activity during in-branch, online (mobile or computer banking) or drive-through transactions are now instantly available, providing more diverse data for a more complete customer profile.
Three financial institutions in particular have moved quickly to gain a competitive advantage and embrace the power of big data to grow their bank business.
Great Western Bank
Great Western Bank has enjoyed 300 percent growth since 2008, but managing and making sense of the data for the $9 billion financial institution has been a challenge. Instead of trying to adapt its paper-based spreadsheet systems to its expanding business, the bank turned to big data management software to efficiently target the most valuable clients. This allowed them to streamline marketing efforts to clients identified as potentially wanting debit cards, ACH services and other profitable bank services, saving both time and money.
Structured data in finance also can benefit banking customers, as Citi discovered. The massive amounts of transactions generated daily by its global banking customers provide useful information about what types of transactions are increasing and where. This is valuable for their commercial banking business. “New silk roads are being created,” Don Callahan, manager of internal operations and technology at Citi, says in a Wall Street Journal article. “We think this information could show signs for which might be the next big cities in emerging markets.”
Bank of America
Bank of America uses big data to close the back door, retaining customers who may be in danger of leaving for a competitor, according to Forbes.
The company uses information from the study of transaction histories, and customer behavior models identify mortgagees or cardholders who may be at risk of switching. Bank of America makes a retention offer to the customer the next time contact is made with the bank online, in a branch or through the call center. Big data also led Bank of America to introduce a consolidated central analytics group and improve communication between online and branch sales channels for a smoother customer interaction.
Big data in finance lets banks make business decisions based on measurable, specific information generated by customer behavior to improve efficiency and the bottom line.
Image source: Flickr
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