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Big Data Brings Customer Challenges, Opportunities To Banks
As banks amass exabytes of data on their customers, they are responsible for mining and responsibly using it.
February 10, 2012
2 Min Read
In 2009, the McKinsey Global Institute estimated that U.S. banks and capital markets firms collectively had more than 1 exabyte--or one quintillion bytes--of stored data. In the subsequent years, that figure surely has grown exponentially, as banks continue to amass massive amounts of data on customers.
All that data means there is a prime opportunity for banks to glean information to improve their customer experience and retention. There are challenges, however, to getting there. Banks have talked for years about using data and analytics to get a better picture of the customer--and with all the data available today, the industry finally may be close to reaching that goal. But how can banks mine the massive amounts of data they've accumulated to pull the most pertinent information that will allow them to best market to a customer, especially when that data is housed in multiple silos?
The problem of how to access the right data from so many disparate locations is a prime concern for many financial institutions, says Emmett Cox, SVP of customer experience for BBVA Compass, a subsidiary of Madrid-based BBVA (U.S. $740 billion in total assets). After all, he noted, all the data in the world is worthless if you can't use it. In fact, Cox says," Data without use is overhead."
For that reason, Cox said, BBVA has embarked on a large-scale project to centralize its data and build a master data set. The endeavor is not going to be easy, he acknowledged, but it will be well worth the effort. "It's not something you do overnight, or within a year, but it takes a three- to four-year strategic plan to do," Cox reports. "The difficulty is huge, but the potential is so great that it far outweighs the cost and complexity." He added that while the centralized data project is being built, BBVA still has the capability to access the data as it is migrated, and the bank can use the master set as it is being built.
According to Cox--who was the senior group manager of analytics and insights for Walmart Financial Services before joining BBVA--financial services companies, while getting better in recent years, lag far behind the retail sector in terms of mining data and using analytics for marketing purposes. But, he added, most banks now realize the importance of managing big data and likely have some sort of plan to centralize data. "Everyone is going through the same type of growing pains," he noted.
Read the rest of this article on Bank Systems & Technology.
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