The Future of Big Data in Canadian Big Banks. The aspects of technology growth and growth of data volume follow Moore’s law which states that “the number of transistors on an integrated circuit board doubles every two years”. Data volume and technology seem to grow at a faster rate than this with estimates of doubling every eighteen months.
The term ‘Big Data’ has been used to refer to large and continuous amounts of data. Multiple channels of information-centric and connected online devices are the sources for big data generation. Traditional data analytic approaches are ineffective in responding to the volume and speed of big data.
The future of Big Data for Canadian Big Banks can be broadly discussed in three aspects:
1.) The opportunity of millenials’ intimacy
Online networks are continuously expanding around the world and data bandwidth has become cheaper and more accessible. This is good news for banks and financial institutions because they can access more data from their connected customers. Portable devices are experiencing a proliferation especially those that leverage the internet. This has changed the expectations of customers towards customized solutions to their financial needs. There is a disruption in the Canadian financial services industry because of inexpensive and easily accessible technology.
Digital connections have enabled big banks to access and analyze market data whereas providing customers with financial services and products with from a higher market knowledge. Consequently, financial consumers are demanding for more customized financial offerings tailored for their needs. The big banks need to fully employ big data and data analytics if they want to catch up and moreover gain a competitive edge. These big banks are facing two main challenges:
- Slow transition from traditional to modern banking
- Loss of market share resulting from new entrants in the financial industry
The big banks need to tap into the millennial market whose adventurism culture is significantly contributing to FinTech companies and financial startup success.
2.) The opportunity of offering innovative products through customer intimacy
82% of the Canadian population uses social media networks making Canada one of the most socially connected countries in the world. The penetration of social media is an opportunity for big banks to leverage customer interaction and transform their businesses. Despite the highly competitive nature of the Canadian financial industry, leveraging social media for customer engagement and participation will give the big banks a competitive edge.
3.) The opportunity of curbing risks
The financial industry is data driven and big data can help in the reduction of risks rather than the credit scoring approach. As a result, the big banks will be able to build safer infrastructure for their customers. Fraudulent activities will be easily identified and keep banks from potential losses. Furthermore, the big banks could use big data for more accurate credit scoring and remain competitive in the industry.
Big Data is revolutionizing and impacting the financial industry in Canada and big banks that want to remain relevant must adapt new technologies provide through data accessibility and availability. Bid data should be used to make real-time decisions and forecast business needs for the Canadian market. Therefore, big banks must be deliberate and strategize on the full implementation of Big Data.
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