Importance Of Big Data In Banking

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DEFINE BIG DATA & IOT IN BANKING Banks hold some of the most personal information about its customers. Although it may seem like just another daily transaction on one’s bank statement, this is a very useful piece of data for banks. Traditionally, banks were used to store customer’s money and allow access at a customer’s demand. The banking industry has evolved tremendously in that it now offers any type of financial product a customer may need. A customer can establish a myriad of financial products such as a credit card, a mortgage, an auto loan, an insurance policy, and investment accounts all within one financial institution. A lot of information must be gathered by customers in order to establish the different types of products offered. This is where the concept of big data plays a big role in banking. Because banks’ capability to establish multiple accounts for multiple products for a customer, big data has made its way into the world of financial services. According to an article by bankingtech.com, “the value of Big Data to the retail banking industry is…show more content…
The term “silo” was coined to refer to the fact that each department within an organization has specific data about a customer only visible to that department. Another barrier is the fact that most banks do not have the staff with the skill set to properly identify and analyze big data. Yet another issue was the fact that banks do not have the strategic focus on big data. Most importantly, privacy concerns also play a big role in banks’ reluctancy to use big data full force. An example given in the study mentions a security breach at a United Kingdom bank where thousands of customer databases were exposed containing personal information regarding customer’s financial

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