The Impact of Big Data on Banking and Financial Systems
Today, most banking, financial services, and insurance (BFSI) organizations are working hard to adopt a fully data-driven approach to grow their businesses and enhance the services they provide to customers. Like most other industries, analytics will be a critical game changer for those in the financial sector.
Though many BFSI organizations are beginning to disrupt their analytics landscapes by gathering immense volumes of data assets, these companies are at varying levels ofBig Data maturity. In many cases, these initial data projects lead business stakeholders to a very simple question:“How can this data help us solve our business problems?”
As customer volume increases, it dramatically affects the level of services offered by the organization. Existing data analytics practices have simplified the process of monitoring and evaluation of banks and other financial services organizations, including vast amounts of client data such as personal and security information. But with the help of Big Data, banks can now use this information to continually track client behavior in real time, providing the exact type of resources needed at any given moment. This real-time evaluation will in turn boost overall performance and profitability, thus thrusting the organization further into the growth cycle.
Identifying more areas where Big Data resources can be utilized most efficiently involves the alignment of business cases and technological capabilities, which reveals opportunities for improved business processes. There are three primary areas where banks and other financial organizations can attain benefits from advanced analytics: the customer experience, operation optimization, and employee engagement.
The pace of almost any data initiatives in the BFSI industry is directly related to the size of the company, as it often requires additional infrastructure investments forenterprise organizations. But despite the size of organization, customer-centric objectives play the primary role among most of data–related activities.
It is very important to focus on the customers’ needs as today’s customers have high expectations on the ways of how they interact with their banks or credit unions. Their buying journey is complex and non-linear so financial players must be able to carefully understand customer preferences and motivation.
To achieve a 360-degree view of the customer, a series of customer snapshots are no longer enough. Companies need a central data hub that combines ALL of the customer’s interaction with the brand, including basic personal data, transaction history, browsing history, service, and so on.
According toMcKinsey, 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.
Data-fueled analytics can empower those in the BFSI sector with customer insights and help create customer segmentation.
