Do you have a healthy big data culture?
One of the phrases on the buzz these days is big data, which claims to transform banking and insurance industries. Before embarking on such a journey, large organisations need to first understand that big data isn’t a plug-and-play initiative that would automatically make them “insight rich” (or super rich, come to that). From my experience, financial institutions are still insight poor, but this isn’t because of a lack of data. Rather, it stems from an inability to utilise existing data sets efficiently for various reasons: multiple data sources, disconnected platforms, lack of capacity and/or expertise on data analytics, are some of them. If you’re not already in a position to handle existing data sets efficiently, are you aware of the problems that big data can impose on your organisation?
According to the Joint Committee of the European Supervisory Authorities, big data is defined by the three ‘Vs’ (volume, velocity and variety). When it comes to variety, I would add a ‘U’ (for unstructured). Still, trying to capture the sense of big data with one definition might be difficult. Looking at other descriptions, one may also add to the three Vs and one U, according to Brewster Knowlton, that big data require non-traditional database systems and business intelligence to analyse them (listen also to A:360 Podcast by Brewster Knowlton on ‘What is big data?’).
The above definition should already be pointing to the direction of why big data isn’t a solution by itself (or at least not an easy solution) and why big data shouldn’t be viewed as a plug-and-play initiative. At the risk of being accused of sounding completely unoriginal, I will advocate that the biggest obstacle for utilising big data effectively is organisational culture, not legacy systems. Here’s exactly where Chris Skinner’s Fintech Bullshit Detector (FiBD) starts beeping loudly. So let’s get practical.
I’m still taken by surprise when clients ask me, “Can we make money out of big data?”. To which the answer is always, no you cannot. You can make money out of servicing your clients. Big data is like a toolset, it can help you or break you. The elements to look at for achieving the former are many, hence the referral to the organisational culture.
