For example, to prospective home loan customers, banks can reveal logic of their lending decisions via an interactive application, thereby providing would-be borrowers with a pathway to credit approval.
Should analytics be done in-house or outsourced to analytics vendors to enable financial institutions to better benefit from big data?
Being a tightly regulated environment, the financial services industry has been slow to adopt cloud computing, where customer details are stored offsite (outsourced). By outsourcing analytics, the industry can benefit from further analysis by combining that data from their firm, with broader economic / industry / environmental data, which may not be readily available in-house.
Also importantly, in today's digital society, it may become increasingly difficult to retain the advanced analytical skills as their demand rises, if done in-house. It stands to reason then, that firms will increasingly rely on third party analytics.
What will differentiate firms through, is their ability to execute that "last mile" in analytics. That is to provide these insights via simple tools to their workforce and customers — this is where the true magic happens.
According to Capgemini's study in November 2014, the top challenge for big data implementation was "scattered data lying in silos across various teams." How should CIOs in financial institutions prevent/overcome such situations to benefit from big data?
Recently, I took my kids to see the travelling circus as it rolled through our town in Australia. My daughter was amazed as the brave man tamed the lion while she sat comfortably enjoying her hotdog. What amazed me is that, 15 minutes earlier, it was the lion tamer that served us the hot dog, before changing outfits and taking to the stage.
This was the way banking used to be. We, as customers, are approached by the bank manager, who often knew our names, and worked with their team to assess our loan as we discussed out financial position in our sharpest suit. As banks have swelled in size, regulations have forced separation of duties and Chinese walls — banks have become like an arm with many watches, but nobody knows the time (the customer).
CIOs, therefore, ought to work in partnership with business leadership to first set strategic goals (e.g. customer intimacy). After which, they need to ensure that the investment slate is reserved to not only harvest key data assets from new projects and existing systems — but to continually provide interfaces that span products and departments to better service the customer.
As departments have their own goals and data, a way to overcome these sometimes competing ends is to install a data analytics team, which is spread across the organisation such that it is able to balance the demands of its domiciled department while supporting the bank-wide goals like a "single customer view".
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