With every click, swipe and tap big data is changing the playing field for the South African industries.
This, the second of a three part series of articles by Morne Bekker, country manager at NetApp South Africa, looks at how big data is changing the financial services and film industries.
As industry executives are watching with alarm as consumer-focused sectors are disrupted, sectors that embrace the change brought about by big data will open up new business models which can lead to competitive advantage.
The financial services industry
As early on as 1994, Bill Gates had predicted that “banking is necessary, banks are not”. Today that statement couldn’t be truer when considering the fundamental changes in how banking decisions are made, and one of the most well-known phenomena of modern banking is the rise of the quants.
Quantitative analysts have become some of the dominant minds of the world’s financial capitals and our traditional image of the Wolf of Wall Street is being replaced by number-crunchers. At the same time, banking customers are changing. Customers expect everything to be available online, anytime, anywhere.
In order to meet these changes, financial enterprises must undergo a process of digital transformation. Rather than simply playing the numbers game and analysing risk and return on investment, the use of big data gives banks the opportunity to deliver a higher quality of customer service, based on insight and information in real time. As the volume at which big data is being stored and the velocity at which it travels increases, analytics platforms and data scientists will be the next big thing in banking.
Banks and financial institutions can effectively utilize data to offer customized products and services to consumers in real time, case in point — an insurance offering on the purchase of international flight tickets. Or a loan offer via SMS to cover a large bill, at the time of the bill receipt by the customer. Based on previous borrowing patterns, a backend algorithm can calculate an appropriate interest rate, and evaluate credit risk before transferring the loan amount instantaneously.
Data is also driving the automation of work procedures and training of machine learning algorithms, as artificial intelligence and advanced analytics has the potential to transform how banks will function in the future.
To ensure that the data is more fluid, as well as easier to store, analyse and use, banks must invest in a data management strategy that allows them to move data seamlessly across different storage environments and geographies, while remaining compliant with all international compliance regulations.
NetApp’s StorageGrid alongside SolidFire solution provides a software defined storage solution which is scalable, automated and programmable. Additionally, NetApp’s cohesive Data Fabric philosophy can give banks the platform to adopt a more customer-curious approach.
The Data Fabric is a software-defined approach to data management that enables businesses to connect disparate data management and storage resources and streamline data management between on-premises and cloud storage.
Benefits for the banking sector includes reduced IT costs, operational simplicity and the ability to incorporate elements such as machine learning. In other words, pre-engineered stacks can include GPUs, giving institutions the floating-point power to run machine learning, AI, regulatory and risk compliance calculations.
Only appropriate storage, handling and analysis of data can help banks learn how they can make their customers’ lives easier, increasing trust levels. Translating big data analytics into better customer service is key to rebuilding customer relationships, and maintaining a squeaky-clean record of technical and security standards will only help build this confidence.