Data is growing at an exponential rate and is expected to cross hundreds of Zettabytes by 2025. Big data analytics is helping organizations to handle the large volume of data in different industries globally. Right from local businesses to high-end corporates, companies are relying on big data and analytics to derive meaningful insights and gain competitive advantage.
Big data analytics is proliferating fast in almost all the industries including banking and securities, communications, media and entertainment, healthcare and education, to name a few. There are numerous organizations who have included big data analytics as part of their growth strategies. Those businesses are no less than role models for others.
In this article, we will be specifically emphasizing on the Banking Financial Services and Insurance (BFSI) sector. A few decades ago, banking processes were transformed by IT systems. These days, it is the big data analytics that is facilitating banks and financial businesses to make them compliant, which is undoubtedly putting them one step forward to their competitors. Big data analytics helps to monitor enormous datasets to uncover market developments, consumer likings, data interactions, and other insights which assist in strategic planning of BFSI organizations.
Big data analytics is helping BFSI sector in some of the following noted ways:
1) Predictive Analytics
The past transaction records of any bank or financial institution can be used as an effective input for forecast and future strategic planning. Big data can benefit companies to track market developments and plan future targets. The analysis can also be interpreted to highlight the risks associated with day to day work of an organization.
2) Faster Data Processing
For businesses with a large dynamic customer database, traditional data management systems aren’t fully-flavored. The traditional system is also deficient to handle the multi-dimensionality of big data. By switching to data analytics platforms, banks would be able to handle gigantic quantities of data seamlessly.
3) Performance Analytics
Banks can customize big data analytics to monitor business and employee performance and then work accordingly on budgets and employee KPI’s grounded on previous accomplishments. Moreover, they can mark training and education of employees and monitor performance in the direction of targets in real time. As a result, banks can make their product more trustworthy to their customers with maximum utilization of resources.
4) Fraud and Malicious Attack Protection
The increased technological usage has given birth to plentiful threats for the BFSI sector. Despite having stringent security laws globally, organizations face attacks and threat on a regular basis. With big data analytics tools and techniques, banks are now able to recognize unusual patterns and take business actions accordingly. Big data analytics also supports biometrics which is responsible to create unique ID for every new user. At the same time, online transaction encryption is also a gift of data analytics which is helping the industry in an effective way.
5) Risk Analysis and Management
The banking industry is full of risk with every single transaction needs to be witnessed carefully. Business intelligence (BI) and analytics tools are able to give banks new understandings of their structures, dealings, clients and architecture to help them sidestep risks. Banks can evaluate the influences that cause risks in dealing with defaulted borrowers. BI can also make systems crystal clear so that the management can identify internal or external dishonest activities and categorize history to prevent future risk.
6) Customer Analytics
Big data analytics tools and techniques provide the BFSI sector with dynamic and updated statistics of their most lucrative customers. It helps them to chart out effective business strategies to entice their customers. Banks can also use evidenced-based data to preserve top notch clients and market them with relevant products.
7) Better Compliance Monitoring and Reporting
The government frequently updates its policies and compliance procedures in different industries. These new standards and rules are being implemented periodically. If organizations use the traditional ways to keep a track of these compliances then it might turn up a bit risky. Big data platform can be used to track these developments so that all the governmental policies and rules are followed by the organization.
Future at a Glance
Big data is swiftly growing to be the most effective technology tool in organizations. IDC predicts that the global revenues of big data and business analytics will grow from US$130.1 billion in 2016 to more than US$203 billion in 2020, at a CAGR of 11.7%. Banking accounted for 13.1% of the total revenues in 2016, and is expected to witness the fastest spending growth in the forecast period. Big data holds a huge opportunity for the BFSI industry to redefine services and provide customers with better experience and is going to be a key differentiator among organizations in the times ahead.