With the current explosion of data, the banking industry is keen to use Big Data to boost the effectiveness of analytics within their businesses, according to Ovum. New research* from the global analyst indicates that while worldwide spending on management information systems in the retail banking industry was US$6.9 billion in 2013, this is set to reach US $9.3 billion by the end of 2018.
Currently, banks’ biggest challenges are revenue generation and risk and compliance management, but they are set to spend more on technology tools to tackle these. Big Data will dramatically extend their ability to enhance areas of the business such as web security, customer analytics and compliance, which will lead to further investment. After spending growth of more than 4 percent between 2011 and 2013, growth is expected to accelerate between 2014 and 2018, with the growth rate ranging between 5.3 percent and 6.4 percent.
“Creating a Big Data project is not just a technology issue though,” says Jaroslaw Knapik, senior analyst, financial services technology, Ovum. “Data can only be trusted when there are people directly accountable for its accuracy and it is formally governed through its lifecycle. The ideal solution requires a combination of people, processes and technology.”
It is essential for banks to understand their data, as knowing whether it is structured or unstructured will dictate their architectural and analytical approach. Banks are capturing more data than they are used to, beyond risk and marketing information, and the process of analysing it is likely to be iterative and exploratory.
Knapik concludes: “Data from customers, banking channels, back-office systems and third-party sources can yield significant insights that are useful for customer marketing, risk management, and infrastructure optimisation, alongside a host of other areas.”