The online world and technology development have enabled companies to access consumers’ personal information through big data. Big data now has penetrated almost every industry and helps businesses to improve and hold their success. Big data enables businesses to gather customer information in order to provide innovative services, that allow companies to differentiate and create more customer value, and therefore higher brand equity.
So what is big data?
Big data refers to a high-volume variety of information that covers a large scope of data points. Big data does not come from the only source: it is collected from multiple customer touchpoints and appears in various formats. It is then analyzed and processed to get the information that is useful and cost-effective for businesses (Gartner, 2013)
Organizations capture and use people’s information to better understand consumers, predict choices, and behavior. The rising popularity for personalization of products and customer demand for an individual approach has shifted all industries approaches to product and service provision. So how exactly big data can be used?
Product and service personalization has been one of the biggest shifts in customer demand in the last years, which is highly used in retail and marketing to create individual customer experiences, deliver exceptional customer service and increase sales.
Combining banking data analytics with social media analytics can help digital banks to build more accurate customer profiles for segmentation, targeting, service offerings, and, most importantly, limit the risks.
Companies also use big data to optimize business operations, increase employee productivity and minimize risks. By combining big data with machine learning, organizations are now much faster in solving complex problems.
Big data in banking
Big data usage in banking has evolved from knowledge-based data of customer transactions, payment records, and credit history to behavioral analytics that apply all of this data to work. The digitalization of banking has enabled the collection of more data on how customers interact with financial services. Now, data quality needs to be a top priority within banks in order to eliminate the possibility of dirty data. Regulations such as GDPR require banks to enhance the quality of their data, as well as putting a lot of pressure on them to be compliant with the list of regulations. Usually, that implies the full anonymity of customer data.
Despite some regulatory restrictions, banking is using big data for cybersecurity, as it helps to detect fraudulent acts, such as suspicious activities and transactions, revealing unusual behavioral patterns of a customer. Big data helps banks better understand customer financial behavior and foresee future needs, which can not only be used for the personalization and efficiency reasons mentioned above: the data that can predict future demands and potential risks make a financial organization more compliant to regulations. Data analytics tools are used for accurate customer verification as they enable to review of applications faster and more thoroughly.
The adoption of big data in the banking industry will be one of the determining factors for banks’ sustainable growth in the digital age. However, the Boston Consulting Group research shows that it has mostly been addressed by larger banks. The reasons behind it are the complexity of operating, monitoring, and analyzing big data. So how can banks and financial services perform better without getting overwhelmed with the scope of big data?
Using big data for your business is not only about gathering information, but also about analyzing and applying it in a way that could benefit business growth. This requires a big team of professionals, which not everyone can always afford. However, in order to change your business approach and deliver a better experience for your customers, you do not need to have too much data. The key is to know how to apply it.
Banking itself is a very costly industry to start a business in. Escalating it with big data analytics requires even more investments. That is why, it is always good to keep an eye open on less costly, but still as effective substitutes. Crassula banking software, which allows you to build your own business banking in a matter of a few days, not only provides you with the platform and helps you to launch digital banking, but also gathers data about your customers. Crassula platform does not only deliver an easy user experience for your banking customers, but also provides you with an administrative panel, where you can view and gather information about all activities of your customers, download them in the required format, and analyze it fast and easy, without having a big analytics team.
Sometimes, to start, you do not need to make big investments. There are plenty of easy-to-use solutions that could satisfy your needs on a budget. You only need to know where to find those! We at Crassula care about our customer growth and efficiency of our platform use, providing software for banking, e-commerce, and more. Find out more at crassula.io
