The availability of new data types, such as online customer reviews,customer sentiment analysis, socio-political events, or macro-economic trends provides a compass of sorts, helpingrisk managers improve their oversight of risk positions and regulatory compliance, and giving CMOs a better understanding of customer preferences.
The Royal Bank of Scotland, a Microsoft customer, needed a powerful analytics platform to improve performance and customer services. To handle multipleterabytes of data and an unprecedented level of query complexity more efficiently, the bank implemented Microsoft Parallel Data Warehouse. As a result, it gained near-real-time insight into customers'business needs as well as emerging economic trends, cut a typical four-hour query to less than 15 seconds, and simplified deployment. Another customer-Credit Suisse — is using our data analytics platform, enabling employees to view risk across various organisational silos globally.
Microsoft recently commissioned IDC to conduct research across industries to better understand what businesses globally,including the financial sector,stand to gain by implementing a "data culture" across their organization. The numbers were eye-popping.
The research showed that over the next four years,financial services institutions and related companies worldwide have the potential to gain more than US$308 billion in value from data, or what we call the "data dividend". Of that amount, US$131 billion of value is forecast to come through improvements in areas such as human capital, IT optimisation and regulatory compliance measures —including risk management.
To be sure, realising the full potential of this data dividend will require that financial institutions no longer settle for status quo.
How then should a financial company harness these new streams of data, and the capabilities of machine learning and cloud-based analytics tools? They can look to cloud-based, big data analytics is aviable solution as they offer flexible, high performance computing capabilities that give financial institutions the context they need to deal with emerging risks appropriately.
Companies should consider the following guidelines to harness the full potential of data, both big and small:
1. Information vs Knowledge:There is an inherent difference between information - the raw data that lives within an institution's computer network, and knowledge - and the understanding of how to harness and apply that information. This nuance is especially critical in making decisions for banks, capital markets firms and insurance companiesthat are seeking to monetize data. Without education and understanding, the value of the information will be unrealized and the opportunity to analyze and use it lost.
2. Democratization of BI:The potential of that information is only as useful as the ability to access and use it by the appropriate people. Microsoft advocates the democratization of BI through self-service tools. Although IT must retain control of data, the tools for the analysis and interpretation of data insights must be in the hands of business users. Ensure employees across all levels of the organisation understand the potential of data and have the tools in place to analyse, visualise and share their findings.
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