Financial firms are seeing a big change in their day-to-day operations as they work toRead More
Big data ‘to transform business model’ for financial firms
Financial firms are seeing a big change in their day-to-day operations as they work to make the most of big data and the opportunities it presents.
This is according to Ernst and Young (EY), which has released new research indicating companies that take advantage of it are gaining a competitive edge.
The firm's Ready to Takeoff report suggests a fifth of businesses that utilise data successfully see performance against their peers increase by up to 20 per cent.
EY highlighted co-operatives and credit unions as two types of financial services companies that should be looking to capitalise on the big data revolution and Drazen Nikolic, a partner at EY's Advisory Services in Germany, noted there are "significant opportunities" to do so. However, he warned the process is not simple, adding enterprises "must face the challenge of drawing a coherent picture from infinite bits of information".
With the amount of data now available to businesses increasing all the time, those that are "able to use analytics to extract value from this data will be the ones able to establish a competitive advantage," Mr Nikolic explained.
Risk management, fraud detection and customer behaviour can all be analysed using big data, but there are risks that companies need to be aware of, such as ensuring they do not break data privacy laws and keeping information secure. as a data leak would hurt a firm's reputation.
Integrating data into day-to-day operations also requires planning, with Mr Nikolic explaining an organisation-wide culture change is often necessary, as well as a "shift in the mindset" of senior figures.
EY is not the only major firm that expects big data to grow and grow in the years to come. Research conducted by Gartner found 73 per cent of firms across all industries expect to invest in it in the next two years – compared to 64 per cent who said the same in 2013 – and only 24 per cent having no plans to utilise it, down from 31 per cent a year ago.