point

September - 2014 - issue > CXO View Point

5 Key Big Data Challenges in Banking Industry

Mousumi Ghosh
VP, Decision Tech Senior Manager,-JP Morgan Chase
Monday, September 1, 2014
Mousumi Ghosh
Big Data is the new oil for Banking Industry. It is here to stay. McKinsey calls Big Data "
the next frontier for innovation, competition and productivity." Banks are moving to use Big Data to make more effective decisions. They are tapping into a growing stream of social media, transactions, video and other unstructured data.

Banks have unique insight into how, where, with whom and when customers are spending money-by analyzing such information, Banks can build an insight into customer intelligence and behaviors that they may well be able to monetize. Checking customers' names against a sanctions blacklist can become highly complicated in a world where a Bank has multiple customers with the same or a similar name. By using Big Data techniques, this reputational risk can be mitigated and managed. Big Data can also be used to enhance account and relationship management. By coordinating the collection of data already in the public domain-such as share price movements, a change in auditors or a director selling shares in his company-and passing it to account teams, understanding of key client businesses can be improved. Further insights can be derived from additional internal data, perhaps focused around the early identification of potential problems-for example, how credit lines are being used against agreed limits; to monitor account crediting behaviors, as problem accounts often credit funds late in the day; and to identify payments patterns of potential interest. Another exciting area for Big Data lies in the potential to create new income streams for Banks. Also Banks can track consumer sentiment, test new products, navigate the marketplace, manage business relationships and build customer loyalty in new and more powerful ways.

Yet Big Data comes with many challenges. It presents a number of challenges relating to its complexity. How Banks can understand and use Big Data when it comes in an unstructured format, such as text or video or how they can capture the most important data as it happens and deliver that to the right people in real-time or how they can store and analyze it, given its size and our computational capacity. And there are numerous other challenges, from privacy and security to access and deployment.

Some of the key Big Data challenges for Banks are detailed below -

1.Legal and Regulatory Challenges

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