If you don’t understand “big data,” you’re not alone. I recently saw this quote:
“You happily give Facebook terabytes of structured data about yourself, content with the implicit tradeoff that Facebook is going to give you a social service that makes your life better.”- John Battelle, Founder of Wired Magazine
I think this just about describes it. Even if you’re not on the big data train, your information already is. How, you may ask? Well, unless you live off-the-grid in a yurt, you’ve probably done business of some kind online. Ever heard of Amazon?
Big data defined:
Big data is a term that describes the large volume of data – both structured and unstructured – that inundates a business on a day-to-day basis. But it’s not the amount of data that’s important. It’s what organizations do with the data that matters. Big data can be analyzed for insights that lead to better decisions and strategic business moves.
Advanced analytics defined:
Advanced analytics is the autonomous or semi-autonomous examination of data or content using sophisticated techniques and tools, typically beyond those of traditional business intelligence (BI), to discover deeper insights, make predictions, or generate recommendations.
Headlines from around the Internet:
Amazon Uses Big Data to Stalk You – Investopedia.com
The company uses predictive analytics for targeted marketing to increase customer satisfaction and build company loyalty. Although big data has helped Amazon evolve into a giant among online retail stores, what the company knows about you may feel a bit like stalking.
Amazon Knows Who You Are – Wired.com
Amazon sees such data gathering as the best way to keep customers happy and loyal, a relationship-building technique that analysts consider potentially crucial to besting other online competitors. "In general, we collect as much information as possible such that we can provide you with the best feedback," said Werner Vogels, Amazon's chief technology officer.
These are two examples of the trove of information on the data gathering and analysis expertise of our most adept and largest retailer.
Honestly, I unabashedly love Amazon. I love that I can log in and it reminds me of what I have recently looked at; what my past orders are; and is spot-on with my recommendations. The list source is amazing and don’t even get me started about Prime Pantry. It’s like the hassle of grocery shopping for my paper products, laundry detergent is just poof! gone. Did you hear they recently acquired Whole Foods? For many of us in urban or suburban locales, this means that the grocery/fresh foods delivery service will soon be available.
So, how, you may ask, does this pertain to banks?
First, I’ll point out innovation. If you don’t think someone like Jeff Bezos is willing to dip a toe into banking, just because he 1) hasn’t done that before, and 2) banking a well-established, well-respected, and long-standing institution, think again. See point above about their Whole Foods acquisition.
Second, think for a moment about the data your FI already has about your customers. Powerful, actionable data about who they are, how they interact with their money via FI, what their preferences are. What are you doing with this data? Chances are that community FIs aren’t doing a whole lot with it. This is where the game changes.
Advanced data analytics is revolutionary for most community FIs. It’s nearly impossible for bankers to know their customers the way they did just 10 or 20 years ago. People don’t step foot inside their banks weekly, as was once the ritual. Therefore, we must evolve – and we can do that by mining the data we have literally as close to us as our core system. Moving toward data analytics can be overwhelming, especially if you are like me, a banker at heart, and not a PhD in math. But choosing with a trusted partner like JHA in helping you better understand your clients is key. The data is there, now we need to get to the work of understanding and acting upon it.
As Jeff Bezos said, “What is dangerous is not to evolve.”