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Big Data: Enhanced customer experience through improved intelligence

Naresh Nagarajan | Feb. 15, 2013
Customers, system integrators and product vendors are all working on various big data initiatives as this technology is roaring into a strong potential.

Catherine is a regular shopper at one of Bangkok's leading departmental stores. This holiday season as she made the final payment at the counter of her favourite store for the groceries bought, she received a text on her mobile that took her by a pleasant awe. It offered her a discount of 20 percent on purchase of a new set of jute furniture! She was surprised to know of this magical offer because she had mentioned of this plan of hers to buy a new sofa set for the house only to a friend on Facebook.

Welcome to the new world technology that is radically transforming the marketplace. The last few years have paved the way for IT industry's inflection point. New technologies have emerged as critical areas of offering and differentiator for service providers, given the increasing benefits offered by them. One of these disruptive technologies that has become the centre of executive attention across industry segments, more so over the last year and a half, is Big Data.

Big data, converged with the exponential climb in enterprise mobility trend, is leading a disruptive phenomenon across markets. The application of statistical model and predictive analytics on big data for actionable insights, served at the point of consumption (mobile) is the next sunrise area for CxOs. Customers, system integrators and product vendors are all working on various big data initiatives as this technology is roaring into a strong potential.

According to a leading analyst group, the big data market will be anywhere between US$80 billion to US$120 billion over the next five years, with financial services accounting for more than 40 percent of the potential spending.

The financial services industry is arguably the earliest adopter of big data solutions, owing to the major benefits for this industry such as risk management, fraud detection, anti-money laundering, and a whole new way of delivering unique customer experience. According to a recent McKinsey report, 15 out of 17 key sectors in the United States have more than 100 terabytes of data stored and managed and the volumes are still growing. BFSI is the lead sector that manages multiple terabytes of data.

Swift adoption

Many factors contribute to the swift adoption of big data in the financial services industry. Risk management is one of the key reasons; post the financial meltdown in 2009, government and financial institutions across geographies consider customer risk profiling and management as top agenda. Further, the apex banking bodies across countries are laying down rules for adherence to liquidity ratio levels, credit risk, and regulation of the microfinance vertical. Traditional customer data alone is not sufficient for modelling the risk, hence spelling the need for analytics on a plethora of unstructured data too. Another key factor is compliance to regulations and norms. With increased cross border transactions and FII-led investment, the banking industry has found itself looking for agile ways to ensure compliance with many laws like Dodd Frank, Basel II, among others.

 

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