In recent years, banks and building societies within the financial sector have had to respond to the vastly changing landscape of the financial world. As customers drive change from the traditional high street branches to a more modern digital service it is imperative that these organisations do not get left behind.
The number of building societies in the UK has dwindled over the last two decades, dropping from 80 in 1995 to 45 in 2013. Meanwhile, the number of branches has significantly reduced over the same period, going from 5141 to 1604, illustrating the massive shift in consumer demands to a digital service.
The challenge facing organisations within the financial sector is dealing with the huge volume, variety and velocity of data, known as ‘big data’, as their services shift towards the realm of digital.
Influx of Big Data
Historically, banks and building societies have been able to serve their data and reporting needs using basic spreadsheets as a means to get by. With the influx of ‘big data’, this outdated approach is now just not enough and many organisations who have been slow to invest in new digital technologies are in danger of becoming reactive rather than proactive to movements in the market and customer needs.
Furthermore, as reporting takes place in spreadsheets via manual extracts from operational systems, there is a challenge to centralise the data – to obtain a single version of the truth. If these organisations are to truly be successful, they must look at centralising their data silos. As Gartner puts it, ‘think global, but act local’.
This mantra means that the information in the organisation must be centralised and available at a global level, which provides the organisation with the ability to make decisions confidently and more accurately on an individual local level.
Overhauling the digital infrastructure
With the modern digital needs of banks and building societies it is vital that there is an overhaul of digital infrastructure to support big data analytics and establish a data-driven culture. Before any sort of business intelligence implementation takes place, banks and building societies must evaluate their own individual requirements and circumstances to ensure the successful implementation of any solution.
Manual processing and reporting via spreadsheets is an issue reaching far and wide, expending valuable resources that would otherwise be allocated elsewhere. A shift towards business intelligence solutions that are self-service with fast, efficient access would provide a significant return on investment for those relying on legacy systems.
Building societies may also want to look at other benefits of self-service business intelligence solutions that go beyond cost-savings such as fraud analysis. While the cost of fraud prevention systems is typically quite high with ‘traditional’ solutions, self-service analytics allows core functionality to be expanded without the large costs usually associated with this level of data insight.
For banks and building societies to keep up with the fast pace of the changing financial market and the ever-growing quantities of data in the world, they must centralise and then harness the available data to tackle fraud, meet customer demands and make inroads into new markets. Without this, there may continue to be a continuing downward trend of the number of banks and building societies in operation in the UK.