Big data analytics and Cloud computing have been seeing widespread adoption in the financial services industry over the past few years. These technologies have been proven to be very beneficial to banks and other financial services providers, enabling them to perform a wide range of tasks more efficiently and effectively, from data management to customer service. Here is a look at how big data and the Cloud are transforming the world of finance.
Big Data in the Financial Industry
Big data analytics is becoming an essential technology in today’s data-driven world, and many financial services companies have joined the big data fray.
According to an article entitled “How Big Data is Transforming the World of Finance“, a survey conducted by NewVantage Partners in 2013 revealed that about 96 percent of surveyed executives from Wall Street firms had implemented or were planning to implement big data solutions.
Below are some of the ways that big data is helping financial services companies:
- Speed up analysis and decision-making, resulting in faster time-to-market
- Enable greater self-service for business analysts
- Reduce the cost of gathering, managing and analyzing data
- Help companies predict risks more accurately
- Facilitate a better understanding of consumer behavior
- Improve customer satisfaction through personalized service
- Enhance the development of new products and services
- Detect fraud more effectively
Examples of Financial Services Companies Using Big Data
Bank of America divides its big data into three categories, namely, transactional data, customer data and unstructured data. With so much customer data to handle, it was previously unable to analyze all its data at once and it had to rely on systematic samples. With big data analytics, it can now process and analyze data from its entire customer set.The bank also uses big data technology to better understand its customers across all communication channels, so that it can present appealing offers to well-defined segments.
Another company that is benefiting from big data analytics is Zions Bank. This bank is using MapR Distribution for Hadoop to store larger amounts of data for longer periods of time, perform more detailed analytics and enhance its security architecture.
Cloud Computing in the Financial Industry
According to a 2013 PricewaterhouseCoopers survey, about 71 percent of surveyed bank executives said that they would step up their investments in Cloud computing. Below are a number of reasons why financial services companies are switching to the Cloud:
- Save substantially on IT costs
- Avoid roadblocks associated with the procurement of hardware, software and datacenter space
- Streamline computer-related processes
- Increase productivity
- Improve accessibility and workforce mobility
- Enhance ability to enter and adapt to new markets
- Achieve better scalability
Companies That Have Adopted Cloud Computing
ING partnered with IBM, Hewlett-Packard and other technology companies to construct a hybrid Cloud computing system that combines the features of public and private Clouds.
Some of the applications for Cloud computing that are being used in the company include business apps, general office apps and utility apps. The Cloud is also being widely adopted by investment firms. Wall Street Systems is using Cloud computing to manage all its trade settlement.
Financial services companies have to stay up-to-date with the latest technologies in order to stay competitive. Big data and Cloud computing are two technologies that they cannot afford to overlook.
About the Author: John McMalcolm is a freelance writer who writes on a wide range of subjects, from social media marketing to Cloud computing.