Anne MacRae, head of financial services at Fujitsu UK & Ireland
Over the last few years, the financial services industry has undergone some massive changes. The economic downturn, on-going Eurozone challenges and some well-publicised data breaches in the banking sector are just some of the factors that have left the industry with a tarnished reputation and under extreme scrutiny. IT managers have spent many a sleepless night worrying about what will happen next, how the industry will continue to change and what it means for the future of IT.
One of the biggest IT developments in recent years has been the increase in the amount of data being transacted on the internet. While the rest of the world has gradually been getting up to speed, the financial industry has long been crunching numbers in massive volumes on a daily basis. Indeed big data and financial services go hand-in-hand. According to PWC, the market for big data is expected to grow to $32.1 billion by 2015, and then to $53.4 billion by 2017. Additionally, 62 per cent of companies believe that big data has the significant potential to create competitive advantage.
But now it’s not just financial data which organisations need to deal with every day. Big data comes in all shapes and sizes including customer data and market performance, each with a purpose and opportunity for organisations, from service differentiation to risk mitigation. But is big data now just a big headache? Are financial services making the best use of their data and do they have a strategy for handling and maximising it?
In this digital era, the amount of data that is created every day is off the scale. Whether organisations realise it or not, big data is not going away and so there is a need to make sure they are utilising it so they can position themselves for success.
This year, Fujitsu commissioned new researchin the UK & Ireland which looked at the key issues in the financial services sector. This is the second time in two years that Fujitsu has conducted a major piece of research evaluating the thinking of IT decision makers in the financial sector. The first survey looked at how the sector was positioning itself within the myriad of technology options and new banking regulations. This year, Fujitsu revisited these issues and set out a benchmark, revealing that financial organisations continue to miss out on many of the opportunities technology presents.
As part of the 2012 study, Fujitsu predicted that big data would become a key theme, as banks start to grapple with the technical challenges of analysing and effectively utilising large amounts of information. The latest research, which interviewed 176 CIOs and IT Directors, revealed that big data has started to play a bigger part in the financial services industry, with a quarter of respondents stating that they have a big data strategy underway. However, over a third (39%) of CIOs and IT Directors remain unconvinced as to the value that big data can provide, holding off on the development of a strategy, or putting plans on ice altogether.
The research also investigated where the information that financial services organisations work with, in their businesses, originates from and how it is used. Almost three quarters claimed that they make “full” use of customer data to improve offerings, but this appears to conflict with the finding from over half (54%) who noted that their business purchases supplementary data from third parties. If “full” use were really being made would such investment be necessary?
Of course there are strict regulations in place that affect how organisations store, process and share its customer’s data, which impacts how a business deals with it. But could a better focus on data strategy help counter some of the costs associated with purchasing data from third parties and release some of the value that integrated and well-analysed data can bring? The answer is yes. Developing a strategy to deal with big data and ensuring that the whole organisation is included on that strategy is vital in completing the customer picture. Fujitsu finds that more and more customers are looking to develop a big data strategy as it becomes an ever growing topic in the boardroom.
Financial services remain resistant towards the adoption of new technology that they feel holds a certain amount of risk. But if they can use their heritage with managing big data to develop a strategic approach to making better use of the data they have today, this could mitigate the spend on information and also drive a better understanding of the characteristics of customers. The implementation of this technology is within the power of IT departments and can enable IT decision makers to not only ‘save the day’ through secure data but also secure the future of their organisation through competitive gains.