The pandemic, while sparking a boom in online payments, has also increased the amount of data that banks can handle.
The global financial services industry, processing hundreds of billions of transactions, generates huge amounts of data every day. The pandemic has increased their numbers, sparking a boom in e-commerce and mobile payments. This opens up more opportunities for banks to grow their business, although it poses new challenges to data management.
By leveraging analytics solutions powered by the cloud, AI, machine learning, and natural language processing technologies, banks can use their data to pursue goals that were never possible before. They now have more ways to market their services and help clients make better financial choices. There are many areas in which Big Data can improve the efficiency of the banking sector. The main ones are:
Customers don't like to deal with bogus alarms, so banks need to minimize false positives. When customers feel that their account information is secure, they are less likely to close credit cards or take other actions to reduce their dependence on the bank.
Social media is deeply rooted in our daily life. This means that banks and insurers need to interact more through these channels. Analyzing big data gleaned from it allows banks to find patterns in customer behavior and preferences.
Thus, data analytics has tremendous potential for creating personalized offerings. For example, people with high income and high costs can send emails advertising a prestigious credit card, and for those who pay with cash, you can create special offers that encourage the use of cards.
If the client is about to pay off the mortgage, the bank can help create a "confetti moment" for him - send congratulations, flowers, and also offer useful ideas on how to use the financial balance. Predicting life events and future financial hurdles can help banks increase customer loyalty.
Big data can also provide insight into the types of devices customers have and which ones are more likely to be used to access mobile apps and websites. This information serves as a "hint" to banks as to which versions of applications are worth investing more in.
In addition, the bank can offer real-time discounts at the retail store.
The Internet has changed the way people think and interact, which is why the banking industry must leverage Big Data to keep up with customer needs. As technology continues to advance at a rapid pace, any lag can leave business on the fringes.
The global financial services industry, processing hundreds of billions of transactions, generates huge amounts of data every day. The pandemic has increased their numbers, sparking a boom in e-commerce and mobile payments. This opens up more opportunities for banks to grow their business, although it poses new challenges to data management.
By leveraging analytics solutions powered by the cloud, AI, machine learning, and natural language processing technologies, banks can use their data to pursue goals that were never possible before. They now have more ways to market their services and help clients make better financial choices. There are many areas in which Big Data can improve the efficiency of the banking sector. The main ones are:
1. Reduce Fraud
In recent years, big data has become a key part of modern fraud detection algorithms. By employing machine learning that better tracks consumer trends, banks are able to expose and flag transactions that are unusual and potentially fraudulent.Customers don't like to deal with bogus alarms, so banks need to minimize false positives. When customers feel that their account information is secure, they are less likely to close credit cards or take other actions to reduce their dependence on the bank.
2. Get to know your client
Understanding the relationship between consumer habits and their banking needs is critical for digital banks. This is where big data comes in handy. Shopping for groceries, paying bills, and other expenses speaks volumes about a customer than general demographics. Many banks already track customer purchase data and use it to provide better financial advice. However, Big Data can complement this information and expand the understanding of what customers are buying, whether they are using cash or credit cards of competitors.Social media is deeply rooted in our daily life. This means that banks and insurers need to interact more through these channels. Analyzing big data gleaned from it allows banks to find patterns in customer behavior and preferences.
Thus, data analytics has tremendous potential for creating personalized offerings. For example, people with high income and high costs can send emails advertising a prestigious credit card, and for those who pay with cash, you can create special offers that encourage the use of cards.
If the client is about to pay off the mortgage, the bank can help create a "confetti moment" for him - send congratulations, flowers, and also offer useful ideas on how to use the financial balance. Predicting life events and future financial hurdles can help banks increase customer loyalty.
Big data can also provide insight into the types of devices customers have and which ones are more likely to be used to access mobile apps and websites. This information serves as a "hint" to banks as to which versions of applications are worth investing more in.
3. Improve the bonus program
Bonuses have long been a part of banking services. And Big Data will improve them. For example, banks can use big data to change the percentage of cashback, as well as other criteria for remuneration - to meet the needs of their target demographic. For example, young professionals without cars do not receive bonus points for buying gas, so banks must offer other bonuses to attract this demographic.In addition, the bank can offer real-time discounts at the retail store.
4. Improve handling of questions
Banks can use cutting edge data to predict the questions customers are likely to have and direct them to the appropriate FAQ pages. By anticipating customer questions, banks can reduce the resources they spend on customer service through the call center and chat. In addition, customer satisfaction will increase as the amount of time spent waiting for help decreases.5. See the "black swan"
Big data, which is analyzed to identify market trends, can help financial institutions avoid crises before they hit. This is possible by collecting information on things like cross-border debt and debt service ratios.What the future holds for Big Data
The volume of data will only grow over time as more people create and use information. At the same time, its profitability will increase as more industries adopt big data analytics tools.The Internet has changed the way people think and interact, which is why the banking industry must leverage Big Data to keep up with customer needs. As technology continues to advance at a rapid pace, any lag can leave business on the fringes.
