According to a recent report by IDC, global revenues for Big Data and business analytics, also known as BDA solutions, are predicted to reach $189.1 billion in 2019. This is an increase of over 12% from 2018 and set to grow to a huge $274.3 billion by 2022.
The concept of big data is constantly being reinvented and always evolving. It is one of the key drivers behind much digital transformation. This includes artificial intelligence, the internet as a whole and data science. But, what is big data and how is it not only changing our world but our banking systems.
Let’s take a look first at what big data is.
What is big data?
Big Data is so large and complex that none of the existing data management tools are able to process it, or store it efficiently. Big Data is a term which we use to describe collections of data that grows over time.
To give us an idea of how large big data is, let’s take a look below at some organizations which generate this huge amount of data according to digitalfoxlabs:
- With data generated by photo and video uploads, exchanging messages and adding comments, over 500 terabytes are generated by Facebook every single day.
- The New York Stock Exchange generates about one terabyte of new trade data per d
- Just one jet engine can generate over 10 terabytes of data in just 30 minutes of flight time. This gives us a good indication of the amount of data used on thousands of global flights per day.
Now we’ve seen how much data is generated in some of our larger organizations, Have you ever thought of the amount of data you create when banking? Every credit card transaction, every message you send, every time you access your online banking.
Banks need ways of processing such huge amounts of data as according to juniper research digital banking is used by almost half of the world’s adult population.
Financial institutions are having to rethink the way they operate to become more effective and a result, more profitable.
Let’s take a look below at some other ways in which banks are looking to capitalize on this data.
- Banks need to provide their users with unified data integration and a platform for analytics.
- Effectively managing market risk
- Allow financial institutes to uncover further investment possibilities
- Improve the customer’s experiences
- Reduce banking costs
- Drive new revenue streams
What are the benefits for banks to use big data strategies?
Banking is one of the business domains that is currently making the highest investment in big data and technologies.
Let’s look at some of the benefits and why financial institutes are leading the way in big data strategies.
- Big data strategies and implementation are giving banks a real performance boost by streamlining all internal processes with the assistance of machine learning and AI.
- Big data helps banks to have a full view of their business. Helping to discover customer patterns and predict market trends
- By using the intelligent algorithms of big data analytics, financial institutes are using big data to detect fraud, prevent malicious operations and reduce the threat of cybercrime.
Let’s close with a quote which shows is how banking and the creative force behind new technologies such as big data, are a powerful combination and will be changing banking systems for the better.
This is an apt quote by the Chairman and Chief Executive Officer of Morgan Stanley.
‘Banking’s a sexy industry! Creative – it’s dynamic, it’s global, it’s fast-moving, you bring a lot of talented people together!’ – James P. Gorman
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.