Financial Companies Can Bank on Big Data

By Guillaume Le Mener, Head of Data Monetisation at Tektronix Communications

Big data is big business, especially when it comes to banking. According to research from SAP and Bloomberg Business Week, 70 percent of banking executives worldwide say customer centricity is important to them. However, achieving this requires a far deeper understanding of customer needs and requirements than ever before; something big data can deliver. Banks have access to a wealth of customer information. The growth of internet banking and the rise of mobile money applications have increased the overall number of customer interactions and, as a result, led to a greater wealth of customer data. But the information banks have is a small fragment of what’s available from other sources. It’s only one piece of the puzzle – if they partner with mobile operators, they can see the full picture.

Today’s consumers are doing almost everything on their mobile devices, meaning mobile operators are sat on a goldmine of valuable subscriber information based on location, presence and mobile usage. Recent Pew Internet Project research reports among adult social media users ages 18 and older, 30 percent say that at least one of their accounts is currently set up to include their location in their posts.

Accessible mobile data goes far beyond transaction records to offer insights into subscriber likes and dislikes and, crucially, key indicators of their future plans. Traditionally, this wealth of big data has been used to improve the user experience for mobile customers and also for promotional purposes. It has proven particularly powerful for mobile operators to cross-sell and up sell services, but now the applications are growing. More recently, operators have discovered new ways of unlocking value from this data, opening up anew set of commercial opportunities for companies in the financial sector.

An operator’s mobile network data is an ideal vehicle through which financial companies can interact with customers effectively. By identifying and configuring data from across the mobile network and pairing it with large sets of users, or even specific individuals if they opt-in, today’s mobile operators can offer a range of insights. Tapping into an operator’s wealth of subscriber data can dramatically increase customer engagement and offer new and improved services.For example, banks and credit card companies can better understand their customers and deliver targeted, highly personalised offers quickly. This information is also of tremendous value to contact centres for problem resolution, which can lead to a higher rate of customer satisfaction and improved problem resolution performance by equipping customer service representatives with up-to-the minute, relevant information.

Another example is preventing ATM fraud. According to a report in The Wall Street Journal, criminals will make successful ATM cash withdrawals this year of more than $1.5 million in the US. And, approximately 15 million Americans are identity theft victims each year; the average loss associated with each case of identity theft is approximately $3,500, and the average amount of personal effort each victim expends recovering from the consequences of identity theft is twenty-five hours.

By using real-time location-based subscriber information from the mobile network, an operator can alert a bank to the possibility of a fraudulent transaction and prevent it. If a customer’s debit or credit card was used in one location while their mobile phone was hundreds of miles away (or even 5 miles with top-of-the-line geolocation data), the bank could decline the transaction. It would seem easy to the customer but requires a lot of technology behind the scenes.

We could take the concept of fraud prevention even further, where there’s potential for operators to enter into agreements with banks to help improve the assessment process for mortgages. Mobile operators, with insights into what their customers buy and subscribe to, amongst other things, can help paint an even more accurate picture of a potential borrowers’ viability than what banks can already see from transaction records.Big Data can also be used for account and relationship management. For example, companies can use mobile data to check a customer’s name against a sanctioned black list of users, helping to limit the risk of returning a false-positive.

Yet this is only the tip of the iceberg when it comes to what’s possible. Of course, any use of data in this way inevitably raises privacy issues. In order to make use of this data without contravening privacy laws, it’s important for both banks and mobile operators to understand regional laws and regulations connected with the use of this information.

At a time when those in the financial sector want to get closer to their customers, using big data in this way represents a powerful, smart opportunity and, if done correctly, can be a win-win for companies in the financial sector and their customers.