By : Cleopatra Mavredis
May 30, 2017 12:00 PM
Big data analytics is already a hot topic for the financial services industry, and it will become more important over the coming years.
Banks have access to a wealth of information about their daily operations and customer activity which, used in the right way, could lead to new efficiencies in areas like demand forecasting and cash management.
Accessing and interpreting data, particularly from the ATM, could prove crucial for your business as you navigate some of the challenges facing the industry today, such as downsizing or transforming your branch network.
The big data explosion
It's clear that big data is a topic that financial institutions (FIs) - and all businesses for that matter - absolutely cannot afford to ignore. In our 'always-on', hyperconnected society, data is being generated and collected on an unprecedented scale. This ceaseless flow of information holds huge potential for companies trying to better understand their customers and their own organization. The challenge is managing and analyzing this data to provide actionable business intelligence.
Speaking to Computer Business Review, Robert Dagge, managing director at Dynistics, said firms that "embrace the complex world of big data" are putting themselves in a stronger position than those that fail to acknowledge the importance of this issue.
"In the current climate of substantial economic challenges and political uncertainty, the companies that are able to adapt and evolve the quickest will be the ones that survive and grow," he added. "We have seen the likes of insurance, banking, leisure, retail, manufacturing and logistics all benefit from understanding of big data capture and usage."
Big data analytics for smaller footprints
One very specific way in which big data analytics can prove hugely valuable for banks today is in the optimization of smaller sites - such as individual ATMs, cash recyclers and smart branches, as opposed to traditional, larger branches and cash centers.
A combination of factors such as cost and the availability of alternatives like mobile banking means many FIs are looking for ways to transform their branch network. Customers still want face-to-face engagement with their bank and ATM demand remains extremely high. As a result, there is a strong chance we will see concepts such as smart branches - featuring solutions like video banking via the ATM - becoming increasingly common in the next few years.
Big data analytics could be instrumental in helping these smaller sites to succeed. By applying dedicated solutions that analyze the wealth of data generated by ATMs, your business will be in a strong position to achieve the right distribution of cash across your network. That means greater efficiency and lower costs for the business, and the best possible availability for the customer thanks to a reduced risk of cash outages. The analytics system draws on a wide range of information, from historical trends and seasonal fluctuations in demand to macroeconomic factors like interest rates.
By making your ATMs smarter and optimizing cash management processes for smaller branches and cashpoints, you can free up the human resources within your business to focus on crucial functions like sales and customer service.
This is one of many benefits that can be gained from the shrewd application of big data analytics, a concept that will grow in importance and potential for the retail banking industry in the years to come.