Wednesday, February 29, 2012

Big Data Provides a 360-Degree View of Banking Customers

Banks can use big data to gain a 360-degree view of customers, even as they lose the personal interaction of branch banking.
As banks close branches and lose some of their personal interaction with customers they will use big data to monitor customers from different angles such as social media, said Karthik Krishnamurthy, AVP in Cognizant’s data warehousing group. Big data lets users process large amounts of data very fast. He cited smart meters in utilities as an example of big data — the meters will generate large volumes of data that the utility has to process. Consumer finance will have something similar.
“Banks spend millions trying to understand how customers interact across multiple products and touchpoints. Now we are looking at world where you move from transaction to interaction — which pages do they spend time on, what accounts do they have with other banks? Big data can help with customer sentiments and give access to the customer across all the touchpoints the bank has with them.”
Financial firms are sometimes reluctant to look at big data because they associate it with the open source Hadoop, he added. One bank CIO told Krishnamurthy bringing Hadoop into the organization seemed at odds with his role of maintaining structure in IT.
Krishnamurthy thinks big data is in many ways a reversion to the old IT approach of building systems and then letting users figure out what to do with them, instead of the standard approach of the last 15 to 20 years of gathering user requirements first.
“”We are now going back to data sources, putting the solutions in place and then taking it to the users and giving them the opportunity to explore and come up with newer solutions.”
Krishnamurthy said this is still in an experimental mode at the enterprise although some banks have deployed big data at a department or line of business level.
“The real value will come when big data goes mainstream. Look at the tech industry — Yahoo, E*Trade, eBay and Intuit have brought big data into the mainstream. Now it is focused on analytical value, but when big data gets adopted within a bank, that’s when you really start seeing business value.


Bank Lending Criteria said...

How do you use advanced analytics, such as profiling and predictive modeling, without access to customer data? When the data required resides in different silos and systems?

Raj Bhatt said...

I am not too sure about Krishnamurthy's comments on banking.

Regulators worldwide are very careful of any privacy invasion by banks to get data about financial activities with other banks. So the view expressed is a very simplistic view of the future world.

I do agree that banks will use social data and other diverse data sets about customers to understand their sentiments about banking with them. However that is not 'Big Data' since banks will filter the Twitter hose for conversations relevant to banking.