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Role of Big Data in Banking- Recently, we have been hearing about Big Data more and more often. In today’s digital world, this technology is being actively used in the financial industry as well. Let’s take a closer look at the tasks tackled by Big Data in banking and the ways it ensures cyber security and increases customer loyalty.
Handling data before and now
Some fifty years ago, a typical bank customer – let’s call him Spencer – walked into a branch in his city, where a cashier met him. The cashier knew his client because he had provided services to Spencer for many years. He knew where Spencer worked and what his financial needs were – and accordingly, he understood how to serve him.
Such a model existed for quite a long time. Banks earned and maintained the trust of their customers who had personal contact with bank employees.
Today, Spencer may work for an international company that has offices in several countries. It’s quite possible that he will stay in London for two years, then in Berlin for a year, then in Dubai for another two years, and his next stop will be Singapore.
If the old scheme had been in place until now, it would have turned out to be absolutely unadapted for today’s reality. No bank employee would have accurate information about Spencer’s financial affairs or know how to meet his current financial needs.
We live in a world where many industries, including the banking sector, solve issues thanks to a new customer service model. Data Science in banking allows one to continuously analyze and store all information from traditional and digital sources, creating an electronic trail of each client. Here the technology like Big Data comes to the rescue.
What is Big Data?
Big Data refers to an ever-growing volume of structured and unstructured information of various formats, which belongs to the same context. The main properties of this technology are volume, velocity, variety, value, and veracity.
Such data sets from various sources are beyond what our usual information processing systems can manage. However, major world companies are already using Big Data to meet non-standard business challenges.
According to Reuters, in 2019, the Financial Stability Board issued a report stating the need for vigilant monitoring of how companies use the Big Data tool. The major players including Microsoft, Amazon, eBay, Baidu, Apple, Facebook, and Tencent have vast databases that surely give them a competitive edge. In addition to their core operations, some of these corporations already offer their clients such financial services as asset management, payments, and lending activities.