Unlike traditional business intelligence systems, new techniques and technologies used with big data allow chief financial officers (CFOs) to gain useful information at a much lower cost. The key task for financial services firms is to separate the “noise” of irrelevant or data from the “signal” of useful, relevant information.
Trends to consider in the age of transformation
Trend 1: Big data is getting bigger. Data is no longer measured in terabytes (a thousand gigabytes) but in zettabytes (a billion terabytes). Leaders in financial services will have to distinguish “good” data from “bad.”
Trend 2: Better information, lower cost. Financial services CFOs will have the opportunity to gain useful information at a much lower cost than traditional business intelligence.
Trend 3: Real-time insight. CFOs can know more than ever about the dynamics of business environments and have access to real-time insights to improve business decisions. The velocity of data has changed, as well; rather than inputting data on a fixed frequency (allowing the production and distribution of reports on a monthly basis), firms are now dealing with continuous flows of data that can, if properly harnessed, be used to generate reports in real-time, with live, streaming updates.
Trend 4: Tapping into the potential. CFOs are uniquely positioned to capitalize on the opportunities presented by big data, which can help them optimize the effective operation of the firm.
Trend 5: Big data, big investment. Financial services firms are making sizeable investments in big data. Recent research shows the FS industry spent $6.4 billion on data-related programs in 2015, and such spending is expected to increase at an annual rate of 26 percent from now through to 2019.
Trend 6: The big payoff. A data-driven finance function can benefit from up to a 35 percent reduction in costs along with a significant strategic upside.
Key strategic imperatives
Banks and other financial services firms undertaking the transformation to a big-data-driven enterprise should address three key strategic imperatives that strengthen the likelihood of positive outcomes while limiting project risks:
- Establish a new data operating model based on the central role of data in decision-making processes;
- Provide a leading-edge architecture, with advanced technologies, new solutions and flexible structures;
- Create a cultural change in terms of the innovative mindset, new business roles and advanced skills required throughout the organization—including senior management—to capture and understand the real business value behind the adoption of big data.
Making the right investments now will be key to optimizing success in the future.
Learn more: Exploring Next Generation Financial Services