Since 2014, the word „FinTech“ has been popping up everywhere, not least in connection with the many new bridge technologies being built and marketed in the finance sector. Big data, or amounts of data that are over the size of a terabyte/petabyte, is one of these technologies. Having recently been brought into the FinTech spotlight, the tool is seen as a step towards customer-friendly financial services.
In the U.S., FinTech companies are gaining a competitive advantage at the point where banks are still tied up in bureaucracy: thanks to big data processes, loans can be quickly and efficiently made out to customers. Shareholders can also profit from these FinTech advancements: for instance, Goldman Sachs is part of Kensho Technologies, which uses large amounts of data to make hypothetical estimates of financial assets.
The big data wave seems to have arrived on the firm level as well. Goldman recently invested in Dataminr, which essentially mines data from all social networks for its clients in the financial sector. Datameer, a startup from San Francisco, also offers big data analysis to financial services providers for their regulatory and compliance duties. Similarly, Singaporian startup Knowesis offers big data services to financial institutions for real-time, cross-channel transaction overviews.
Arrived, but not commonplace: for many firms, data technologies still seem to remain a mystery. According to research by Kienbaum, currently only about 7 percent of the surveyed companies in total use data analysis software. Another study by the IT services provider Iron Mountain showed that every third company is missing an IT specialist for big data analysis purposes.
To truly profit from the migration to digital, merchants must understand their customers and the market, inside and out. The quickly growing e-commerce market in Europe is an area in particular that can profit from big data tools. Through an optimized data analysis, a customer receives tailored recommendations and the merchants profits simultaneously from higher customer loyalty and turnover. To find out more information about big data, sign up for our bi-weekly newsletter.