By Colleen Healy, managing director, US Financial Services at Microsoft
The world is swimming in data, and sometimes it may seem hard to stay afloat. We create so much data every day, from insurance actuary spreadsheets and bank statements to Facebook updates and cat videos. In fact, there is almost twice as much data stored digitally around the world as there are liters of water in all oceans combined.
There is a lot of potential for organizations to use big data to change the way they conduct business, make discoveries, and find insights that were previously undiscoverable. That’s why we are excited to announce the findings of a recent study from Celent,
who surveyed financial institutions - specifically insurers and banks - on their thoughts on big data in the industry.
Big Data brings big ROI:
The verdict is clear. Senior leaders are paying attention to big data. Nine out of ten respondents believe that skillful use of big data will define the future success stories in the financial industry. Even more impressive, every responder who has big data experience feels that the value of a successful big data analysis strategy can give them a leg up on their competitors. Adopting big data solutions is proving to be a great way to maintain competitive advantage in the marketplace.
So what is the value? Not surprisingly, insurers and banks have different ideas.
- Insurers see the greatest value in marketing and research to develop new products.
- Banks see much more value in using big data for risk and fraud initiatives, and place a high importance on marketing and customer experience.
But not everyone is there yet. Even though these companies see great value in big data implementations, only a few actually have experience using it. Some companies have had an immediate need to implement big data solutions, while others are grappling with the magnitude of technology and where to even begin. One thing is clear though, the ones that move faster will have the edge, as responders with big data experience feel that it gives them an advantage over their peers. Banks are ahead of their insurance counterparts, with 40% having at least two years’ experience working with a solution.
While we are still early in the big data implementation stage for financial institutions, 70% of big data projects underway from those who have used big data for over a year have either met or exceeded business expectations. Big data is going to be a big part of the future of the financial industry, so those companies who haven’t implemented a big data solution should seriously consider it, or risk being left behind.
Smart management is needed for success
Big data holds great promise for the financial industry, but it needs to be managed well. The findings show that in order for it to be ultimately successful, a few things need to happen:
- There needs to be a culture change across the enterprise that embraces data and that analysis it can provide.
- The information flow needs to be managed in a thoughtful and deliberate way.
- Capturing the potential information and analysis won’t be possible without employee education and understanding.
Big data isn’t new. We’ve known for years the deluge was coming. What is new are peoples’ attitudes toward big data and the availability of tools to help analyze it. Financial companies and organizations that implement it well will find success in the long run, be better equipped to help their customers, and stay current with the latest technological advances. With big data, people will have access to powerful new insights and know how to take action on them. This is where the potential for true innovation lies.