Advisory Services
Audit
Consulting
ESG Advisory
RBI Registration
SEBI Registration
IRDA Registration
FEMA Advisory
Compliances
IBC Services
VCFO Services
Growing
Developing
ME-1
ME-2
EU-1
EU-2
SE
Others
Select Your Location
You will find every business today is data-driven because, in order to make effective decisions, data analytics and insights are essential. It is particularly essential in banking.
Financial institutions have to leverage big data properly as per their compliance requirements and high levels of security standards. Banks are making the best use of the data they possess with a view to improve on their services to customers. The use of big data in banking is bringing positive transformation.
Banking and financial sectors throughout the globe are discovering new and innovative methods through which they can easily integrate big data analytics into all their processes for optimal output. It has many benefits as far as banking and financial sectors.
With the advancement of digital technology, data has become critical, and banks are working hard to embrace and adapt to this change. The scale of competition is significantly high in the industry, and new tactics have to be adopted in order to survive and thrive in the competitive market environment so that the business grows with success.
The adoption of big data has allowed banks to improve the standards and the quality of services that they provide to their customers. Therefore it is no surprise to us that banking is one of those business domains that make the high investment in big data and its technologies.
Another essential role of big data can be understood through this that amount of data generated and handled by banks and financial institutions are enormous, but because of this technology, as the number of electronic record increases, banks, and financial services is actively using it to store data and improve scalability.
Big data brings in a number of benefits to banks. Some of them are mentioned below:
With the help of big data [1] analytics, banks can analyze market trends and decide whether they should lower or increase interest rates.
With fraud detection algorithms, banks can easily identify customers who don’t have good credit scores and not provide loans to them. Using such algorithms, banks can detect fraud and prevent potentially malicious activities.
With the help of big data analytics, it can aid banks in knowing customer behavior based on the inputs received from their investment, shopping trends, or financial background. It helps banks to retain customers and also attract many more. Customer loyalty can be won by providing personalized banking solutions.
The use of big data allows banks to optimize and streamline their internal processes, thereby boosting their performance and reducing operating costs.
As you would know that banks’ customer centers are clogged with many queries regularly. Big data tools can help in going through high volumes of data and respond to each of them swiftly and adequately. With this, customers will also feel valued that their feedback is being taken promptly.
With performance analytics, the employee’s performance can also be assessed to know if they have achieved the targets. Big data can help in knowing how it would help them to scale better.
There are certain challenges with its use in banking. Some of them are mentioned below:
The banking sector has been slightly slow to innovate. Most legacy systems can’t cope with the growing workload. In its process of collecting, storing, and analyzing data with the outdated infrastructure, it may put added pressure and can put the stability of the system at risk.
If we consider the use of legacy systems, there may be a risk as there is dealing with huge amounts of data. Banking providers are required to make sure that the amount of user data they collect and the process must remain safe. The fact of the matter is there are only a few percentages of banks worldwide that can handle the threat.
Banks may find it difficult to cope with a large amount of different kinds of data.
Implementing big data is in the best interest of any financial institution, but as stated above, it has its own challenges as well. Therefore there are some things that banks must be aware of before proceeding.
As mentioned above, the massive amount of big data puts a considerable strain on legacy systems, and many such systems lack advanced analytics in banking. Therefore banks must first look to upgrade their existing infrastructure system before they proceed towards implementing such a strategy like big data.
Data quality management should be one of the top priorities. Once a bank upgrades its system, data that is inaccurate or incomplete can hamper results. Therefore banks must review and consolidate their existing data before they enter into a new system.
When an acquisition happens, new databases are added to the bank’s data estate. The data spread out across each of the systems must be consolidated in a central repository. By doing that, banks can easily identify unwanted data.
Read our article:Data Analytics in Banking: Application, Challenges & Opportunities
Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.
On 18th May 2023, the Securities Exchange Board of India (SEBI) released a Consultation Paper o...
Infrastructure and real estate have been regarded as India's "sunshine sector" since the turn o...
On 22nd May 2023, the Central Board of Direct Taxes (CBDT)[1] issued a new circular under secti...
Anyone can have different sources of income. With globalization and the opening up of economies...
The Reserve Bank of India (RBI) is crucial in regulating NBFC, including branch openings and cl...
In India, Non-Banking Financial Companies are subject to certain restrictions from taking publi...
It's usually a good idea to diversify the assets in your financial portfolio, especially during...
A nation is being built by the non-banking finance company through the development of wealth, t...
A corporate entity known as a portfolio manager complies with a contract or agreement with the...
Identifying and analysing risks associated with individual portfolio investments, such as equit...
Are you human?: 8 + 6 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
The present health crisis due to the Covid-19 pandemic has caused a faster rate of adoption of contactless payments...
26 Aug, 2020
If you have followed the development in the fintech space, you would also have known about neo banks. They were pop...
16 Oct, 2020
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!