Opening the vaults: how banks could lead the way with big data
CapGemini suggests financial services firms could be among the big beneficiaries of big data. If they learn to use it
Inside the Enterprise: It's often said that financial services today are not about money, but about data.
Instead of cash, most of the world's transactions flow as bits and bytes. Vaults contain not gold, but hard drives with billions of virtual entries. Plastic cards have replaced cheques, and with Bitcoin, we've seen the arrival of a global, virtual currency.
All this requires a vast amount of data to work. And the trail of daily transactions also generates an enormous amount of information, from the habits of individual shoppers, to the health of entire economies.
As a result, banks are sitting on a treasure trove of valuable information. But financial firms have yet to really turn this information to their advantage, according to CapGemini.
Vaults contain not gold, but hard drives with billions of virtual entries. Plastic cards have replaced cheques, and with Bitcoin, we've seen the arrival of a global, virtual currency.
Some 60 per cent of banking executives in North America believe that big data will offer a competitive advantage, the firm's research found.
Globally, 70 per cent of banks think it is important to put more focus on the customer something that data can help to do. But only a little over a third of banks 37 per cent actually use analytics to understand the percentage of savings, investments, insurance or other business a customer places with them, rather than with rivals.
In some ways, this is a strange situation. Banks are not new to big data: they have long developed large "systems of record" to manage transactions, on the retail side, and complex algorithms to predict markets, in investment banking. Banks are, or should be, good at handling and making use of data.
But CapGemini believes that simply having access to data is not translating into a data-driven business for the banks.
Most have not yet embarked on a live big data project. Whilst businesses in other sectors, including retail and even insurance, have increased their investment in data analytics, banks are still mostly at the pilot stage.
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