BFSI takes a cautious route to big data
Even though Big Data is making waves in the enterprise across the globe, and especially in the Asian market, where many companies are employing big data analytics to boost their growth and profitability, analysts see a certain reluctance from the BFSI segment to adopt Big Data.
A recent report from The Economist revealed that for most Asian companies, Big Data collection and analytics is far more popular in recent times than any other IT trend and sectors healthcare, real estate and energy sectors are driving the growth. However, the same cannot be said about BFSI organizations that are the least likely to employ data analytics. Most of them are currently prioritizing technologies such as IT security, software-as-a-service and mobility to boost their bottomline.
Businesses that are rapidly embracing Big Data, believe it’s as a tool to help improve profitability, reduce operational costs and offset rising labor costs, among others. But many in the BFSI do not consider it the most important technology this year. As R K Chattani, Deputy GM-IT at UCO Bank points out that although Big Data offers considerable benefits to customers as well as to organizations, several issues need to be addressed to capture its full potential. “Policies that are related to security, privacy and intellectual property are of prime importance in a big data world. While banks are always anxious about the security and governance of their data in general, Big data often creates greater complexities and unforeseen issues that many banks are not prepared to handle,” he says.
He explains with an example. According to him, big data analysis is performed with a vast array of data sources that might come from many precarious sources. Banks should also need to be extremely aware of the security and governance policies that apply to various big data sources. At present, he says, for banks, the key priority should be IT security as well as mobility.
Enterprise technology analyst Neetu Shaw, agrees with Chattani. In an article in Financial Brands, she mentions, “Often times, a vast majority of banks’ traditional data governance and data management practices aren’t capable of supporting Big Data requirements and can lead to costly and delayed data analytics projects.” The other problem she points out is business alignment wherein banking C-suites have very focused business objectives. Often times these business objectives are not in alignment with Big Data ideas. This is a major roadblock for financial services organizations. In order to be successful CIOs and CMOs in the financial services industry need to partner if they want to experience the true value Big Data can bring.
However, this does not mean Asian banks and financial institutions are laggards in Big Data adoption. They are just being cautious and the industry is certainly optimistic about it. As Anil Kuril, Deputy General Manager-IT, Union Bank of India, believes big data will become a key basis of competition, underpinning new waves of productivity growth & innovation. “In the banking industry, until now, we were dealing with only structured data which is comparatively easy to turn data into information with the help of data warehousing tools by performing various analysis. However, the increasing volume and velocity of information captured by enterprises, the rise of multimedia as well as social media will fuel exponential growth in data for the foreseeable future,” he says. He adds that with the integration of social media with the banking system, it becomes imperative to analyze the trend in order to improve the product sentiments as well as acquire new generation customers. Even though the sector is a little wary, as technologies keep advancing, we expect that banks in India will be more serious about their big data strategies.
Experts believe that taking a holistic approach for setting up a Big Data strategy, by involving many of the organizations’ key stakeholders, not only banks but also the financial institutions in general can better leverage and gain value from relevant information. As Shaw mentions in her article, the ability to blend Big Data analytics and digital strategies can turn actionable analytics into marketing results. When done right, Big Data has become a critical tool for competitive advantage for the BFSI segment.
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