“Big Data” is an expression used more frequently by executives outside the IT team today. More leaders are starting to realise that there is genuine value that can be unlocked just from the information the organisation has stored on customers. Big Data is now a tool that is being used to help organisations understand and get much closer to their customers.
Consider the banking industry as a good example. A customer would build a relationship with the employees at their local branch. The manager might personally deal with the customer when they need a mortgage or loan. But in the modern banking environment, customers use branches far less often: apps and online banking have exploded in popularity, but how can banks remain close to the customer in this environment?
Big Data is the answer. Unlocking all that information about how the customer behaves when they are connected to the bank gives insights into their preferences and needs. Standard Chartered is a great example of a bank that has understood this message and undergone a wave of innovation that embraces the opportunity Big Data presents for them to better understand their customers.
But financial data is extremely sensitive and customers are becoming more and more aware that banks have their private data. Customers are becoming more aware of privacy issues and protective of their data so for a company like a bank to keep on receiving data freely from customers, they need to demonstrate that it is secure and that there is some value that will be created for the customer.
Standard Chartered has several specific areas where they use Big Data techniques to understand their customers better:
- Fraud prevention: fighting the cybersecurity war by having a deep understanding of customer behavior, so potential fraud can be spotted and blocked quickly and automatically
- Compliance and reporting: ensuring rules are followed automatically and reporting to central banks by extracting to required data in real time rather than periodically
- Digital Intelligence: offering personal service based on customer behavior and using insights into past behavior to try predicting future needs for the customer
Standard Chartered is even connecting specific retail offers to customer behavior, so if the customer is a frequent visitor to a specific coffee store then the bank can create offers in partnership with the coffee store.
By offering greater protection against fraud and offering a better customer experience through digital intelligence Standard Chartered has found that customers are willing to open up and share their data. Customers can see a genuine benefit from letting the bank examine their financial spending patterns and needs.
It’s not just Standard Chartered that has been exploring Big Data, but they have been researching Big Data for several years now and they started on attempts to improve automatic compliance after the global financial crash in 2008. They really have been exploring this for years now so it’s no surprise that their customers are noticing the benefits.
Let me know what you think about the opportunities for banks to use Big Data by leaving a comment here or get in touch via my LinkedIn.