Financial Institutes Finally Realize Big Data Is Important
May 30, 2016
One of the fears of automation is that human workers will be replaced and there will no longer be any more jobs for humanity. Blue-collar jobs are believed to be the first jobs that will be automated, but bankers, financial advisors, and other workers in the financial industry have cause to worry. Algorithms might replace them, because apparently people are getting faster and better responses from automated bank “workers”.
Perhaps one of the reasons why bankers and financial advisors are being replaced is due to their sudden understanding that “Big Data And Predictive Analytics: A Big Deal, Indeed” says ABA Banking Journal. One would think that the financial sector would be the first to embrace big data and analytics in order to keep an upper hand on their competition, earn more money, and maintain their relevancy in an ever-changing world. They, however, have been slow to adapt, slower than retail, search, and insurance.
One of the main reasons the financial district has been holding back is:
“There’s a host of reasons why banks have held back spending on analytics, including privacy concerns and the cost for systems and past merger integrations. Analytics also competes with other areas in tech spending; banks rank digital banking channel development and omnichannel delivery as greater technology priorities, according to Celent.”
After the above quote, the article makes a statement about how customers are moving more to online banking over visiting branches, but it is a very insipid observation. Big data and analytics offer the banks the opportunity to invest in developing better relationships with their customers and even offering more individualized services as a way to one up Silicon Valley competition. Big data also helps financial institutions comply with banking laws and standards to avoid violations.
Banks do need to play catch up, but this is probably a lot of moan and groan for nothing. The financial industry will adapt, especially when they are at risk of losing more money. This will be the same for all industries, adapt or get left behind. The further we move from the twentieth century and generations that are not used to digital environments, the more we will see technology integration.