Big data solutions are vast, swift, and today, they are essential to marketing and business strategies.
Companies in banking and finance sit in advantageous positions as most information in their customers’ transactions is required to be documented online for regulatory purposes.
This information allows companies to gather incredible intel on their consumers, to project future behaviors and most aptly, to make real-time decisions based on real-time data.
After analyzing many big data finance use cases, we have compiled some the most effective, immediate ways big data insight can be used to fuel decision-making and growth.
Five Ways to Use Big Data in Banking:
After the 2008 economic crisis, the Dodd-Frank Act sprang into life, requiring detailed documentation and monitoring of all trades. Although a decade later, many find the information request tedious, this information is critical in financial firms, who can better detect abnormal trading patterns. In the long run, early detection is better for everyone.
Banks are no longer in the money business; they are in the consumer business. That is, fitting consumers with financial tools and opportunities that best serve that consumer’s lifestyle and desires. Considering banks see many different types of people and wide ranges of financial assets, it can be difficult to pinpoint how a consumer might like to see their financial rewards manifest.
Required information can offer assistance here, gleaning insight into customer behavior, preferences, and life goals. Big data casts consumers into various segments based on the following information: demographics, daily transactions, external data and interactions with customer service.
Marketing segments are then used to better understand consumer needs and to more aptly direct marketing campaigns.
Many of us have experienced the panic (sometimes annoyance) of a fraud alert on our account. Often induced by a simple out-of-state transaction, we roll our eyes. However, banks are using our typical purchase patterns to more accurately detect when fraudulent activity is taking place, possibly even before it can take place. Transaction habits are not limited to geography; they include amount, time of day, type of establishment, etc. We can all agree on the benefits of our banks monitoring account activity for the sake of protecting our money and assets.
Big data allows banks and finance firms to further narrow their understanding of customer segments, and hone in on specific consumers’ needs. Between transaction behavior and social media monitoring, firms can extract a robust picture of customer preferences, lifestyle, and goals (some of which that customer has yet to realize). Once these needs are understood, the firm can market certain services and features that are relevant to the consumer’s needs.
With so much financial activity being conducted online, there isn’t always the opportunity for bankers to personally get to know customers, to understand their lives and situations. Big data takes us (in a different way) back to the days of a personal relationship so that business can proceed accordingly.
While all firms are regularly monitoring and assessing risk management, big data allows for real-time alerts to sound if a threshold is surpassed somewhere out of the analyst’s sight.
With so much information so readily available, businesses in finance and banking cannot afford to overlook opportunities for insight extraction and implementation. For professional guidance on big data analytics use cases financial services and how to get the most out of your consumer data, get in touch with our team of experts at Quantum FBI.