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Banks to use business data analytics tools for 'Bank The Unbanked' drive globally

The explosion of data in the Banking and Finance Sector is driving the banks to focus on big data and analytics tools. Data has always been a key enabler for businesses across all sectors, and banking is clearly no exception.

Banks are now looking to use business data analytics tools to provide financial services to more than 2 billion individuals across the world. This is despite the fact that only 51 percent of the global adult population have bank accounts or access to formal financial institutions that can cater to their needs. According to a report last year by the World Bank, only 40 percent of the world's adult population has an account at a bank or with a mobile money provider.

Data is the key driver of change.

Analytics tools can help banks to meet these challenges through their ability to sift through the vast amounts of disparate data available, providing business insights that allow C-suite executives and decision makers to focus on their most important initiatives.

This growing adoption of big data and business analytics tools will enable banks to focus on helping the unbanked. The data can act as an important indicator for banks to understand reasons behind remaining "unbanked" globally, and analyze the market conditions that may be keeping them out of mainstream banking services or financial products. Analytics tools will also enable banks to develop more targeted customer acquisition strategies, by using granular profiling based on behavioural and attitudinal traits of its potential customers.

Analytics tools such as automated rules engines and data visualization tools are the most popular big data technologies among finance and banking organizations today. These private sector banks can improve risk management, account provisioning and cross-selling through real-time insights into customer buying behaviour and business data.

Last year, Macquarie Bank Limited in Australia announced that it was using IBM's SPSS Analytic Cloud service to help deliver new insights from their vast amounts of customer data—which can be a challenge for a bank with more than 1 million active accounts. With the solution, Macquarie is able to make its customer data more actionable and turn it into a competitive advantage.

The global market for business analytics tools is expected to be worth $10 billion by 2021, growing at a compound annual growth rate of 9.5 percent from 2016 to 2021, according to WinterGreen Research Inc. The key drivers for this growth include the increasing demand for improved customer experience across various banking channels and the worldwide digitization of financial services.

Factors contributing to growth

The significant growth opportunities in big data analytics tools are mainly attributed to rise in demand for these technologies, increasing operational efficiency including better risk management, more targeted customer acquisition strategies through granular profiling of customers based on behavioural and attitudinal traits. The ability of business data analytics tools to quickly process high volumes of data from multiple sources and provide accurate insights that can help financial institutions with their decision making processes is a major factor driving the growth of this market.

Customers are increasingly becoming tech-savvy and would prefer doing banking tasks online through mobile banking apps, which has increased the need for offering personalized digital banking experiences to customers.

The adoption of best practices and technology platforms for data management, discovery and visualization are acting as key enablers for the growth of this market. For instance, last year's ransomware attack on SWIFT-enabled banks across the globe led to an increased awareness about the need for end-to-end encryption used by these financial institutions. The adoption of best practices and technology platforms for data management, discovery, and visualization are acting as key enablers for the growth of this market.

The exponential growth in the number of internet users across the globe has led to increased usage of mobile devices by individuals to access information on the go. The increasing need for personalized web experiences is impacting customer behavior through improved use of multiple channels including social media, mobile, and video.

Key Players

The market for big data analytics tools in the finance and banking sector is fragmented with the presence of multiple players competing on the basis of product portfolios and adoption of advanced technologies to offer better customer experiences. Some of the prominent companies active in this space include DataSolutions Inc., SAS Institute Inc., TIBCO Software Inc., Qlik Technologies Inc., and Oracle Corporation.


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