Q4. How do we begin to address the "Big Data"issue?The advent of alternative data sources through social media, along with the increasing number of access channels and devices, is exploding the amount of unstructured data that banks need for decision making. While the technical and organizational infrastructure aspects of big data are important, the effective use of big data takes true IT and business alignment. Here are the starting points:
- Knowledge Definition -- This starts with understanding the business issues and where decision making needs to be improved or enabled by big data technologies (big data use cases). Despite advances in portals and analytic systems to help users make decisions, the business user will typically need IT to assist in accessing and collecting the right data for the decision maker based on this knowledge definition.
- Reduce the Noise -- This is not just about the quality of data and its relevance to understanding the issues and being able to make decisions. It also relates to reducing the amount of data to what is necessary based on the bank's definition. With the explosion of both structured and unstructured data, the key is to get to the right data to make the best decision possible.
- History Is Just the Start -- While historical data is important, it is just once piece of the puzzle. Today we have an increasingly integrated world where the luxury of time to make decisions simply does not exist. Banks therefore need to evaluate where they need instantaneous data (and perhaps more importantly – where they don't), the value of supporting this model within the enterprise, and the types of decisions they can make around this data to differentiate themselves in the marketplace.
[For more on managing and sharing data across departments and consolidating reporting systems, see related article.]
Ultimately, successful banks understand that although big data is a challenge, big data that's factual, fast and available at the right time is where the value to the enterprise and its customers can be found.
David Potterton is VP of Research for the global banking, insurance, capital markets and risk management practices of IDC Financial Insights. These advisory services cover retail banking, cash and treasury management, payment services, insurance and core corporate banking technologies, as well as capital markets and risk. Follow Potterton on Twiiter @dpotterton.