Big Data: Key to Innovation and Transformation in Banking
TransUnion advocates tech-based solutions amidst growing challenges
INFORMATION solutions provider TransUnion Philippines’ recent Big Data Summit tackled the rising power of big data in banking and its potential to transform businesses and manage the emerging difficulties brought about by technology.
In particular, it emphasized big data’s capability to innovatively disrupt the industry and fuel its future.
Banks and other financial institutions have everything to gain in harnessing disruptive technologies like big data analytics in their operations as even the Bangko Sentral ng Pilipinas (BSP), the country’s chief finance regulator, recognizes that the digital transformation of the financial services sector is the new frontier.
For TransUnion Philippines President and CEO Pia Arellano, “Information is a very powerful thing. Information drives business, opens doors, and empowers and enriches the lives of consumers. Change and transformation, however, can come with many implications, and the path to innovation and new technological solutions is not necessarily always an easy one. It involves courage, a willingness to learn and evolve, and a consumer-first mindset.”
The use of big data, with its capability to collect, process, and analyze information in large volumes, has been continuously driving innovation and the transformation of the landscape within the banking industry. Financial institutions are adopting big data analytics to gain a competitive edge and better serve their customers as they continue to augment and improve the intricate complexities of their banking operations that result from the rapid proliferation of data.
According to a BSP-published research paper, big data for the finance and banking industry is all about making better sense of customer behavior to achieve more accurate assessments of customers’ creditworthiness, risk appetites, and qualifications, while at the same time enabling financial institutions to offer improved products and services to their clientele.
Big data’s economic impact
Big data is the extensive collection of varying information that can be generated and analyzed at optimal speed and mined for informative and analytical purposes. However, the majority of finance companies that participated in a study by TransUnion and Versta Research said that data and analytics are evolving faster than their own internal capabilities. Together with ever increasing consumer expectations, the evolution of data and analytics poses a challenge for businesses to analyze data in the speed the market demands.
To meet with the challenge, insights from the study show that business leaders use analytics tools as a competitive advantage to yield more room for growth. TransUnion, for instance, has started to harness the power of trended and alternative data to more accurately predict credit risk. Its members can now leverage this power to cross-sell the right products to the right customers.
Big data analytics benefits both ends of business interaction. It not only pushes industries to identify and resolve certain business deficiencies, but also allows them to better understand their customers and better meet their needs. On the other hand, it serves as an avenue for consumers to be able to relay what they need and expect from their product and service providers, and, in turn, be heard.
“The vast amount of information produced by businesses every day, coupled with continued technological advancements, is becoming the catalyst for the acceleration of the global economy. The big data chain ultimately leads to knowledge and solutions, which present new opportunities that will enable a new range of products and services for both the business end and the customer. On a larger scale, big data affects the global economy more significantly than we realize, and it will continue to do so as technological advances further progress,” Arellano said. (TransUnion Philippines)