How Big Data changes the rules in banking

Online banking has been a win-win proposition for banks and their customers. Customers get the speed and convenience of self-service and banks enjoy big savings on transaction costs. But for many consumer banks in particular, going online has also meant losing the critical customer engagement that branches have long provided. When one online banking service looks pretty much like every other, banks need to find new ways to set themselves apart. By leveraging cloud and big data analytics, banks can re-engage in new and innovative ways via web and mobile platforms.

In a recent report outlining a new digital vision for consumer banks, Accenture offer examples of what some banks are already doing to enhance the online experience and strengthen bonds with their customers.

  • Banco Bilbao Vizcaya Argentaria of Spain captures more than 80 transaction characteristics every time customers use their debit card and uses the information to help consumers manage and forecast day-to-day spending.
  • BNP Paribas Fortis of Belgium partnered with the country’s largest telecommunications provider to create a mobile e-commerce platform that enables consumers to shop and pay for products from their smart phones. The service makes it easier for consumers to find merchants and helps local businesses get paid more quickly, which is good for the bank’s commercial business.
  • Commonwealth Bank of Australia has a mobile app that enables customers to use augmented reality to get detailed information about homes they might want to buy by simply pointing their smartphone camera at the property. The app also tells users exactly how much they will pay for a mortgage from the bank.
  • Five of Canada’s largest banks have partnered with Sensibill to integrate automated receipt management functionality into their digital banking apps. Customers can use the service to organize receipts and get reports that help them with budgeting.

These efforts are successful because the banks see themselves as more than just money managers. They’ve broadened their perspective to become allies to their customers in helping them become more efficient and achieve their dreams.

The cloud offers unprecedented capabilities for banks to integrate other services into their core applications through APIs. For example, many financial services companies now offer credit reporting as a free feature. Credit agencies are eager to promote their brands through this kind of integration, and they make it easy for banks to work with them.

When cloud is combined with big data, banks can put their existing knowledge of their customers to work in new ways. For example, they can segment customers by spending and saving behavior and offer services tuned to different budgets. They can target services to distinct customer segments based on geography or age group by overlaying demographics on customer data. They can even listen in on social media conversations to pinpoint opportunities to offer, for example, car loans to fans of specific vehicle makes and models.

The biggest impediments to this kind of transformation aren’t technical but rather cultural. If banks see themselves as simply stewards of money, they limit their potential to break out of historical niches. But when they see themselves as allies in their customers’ financial success, they can use the cloud and big data to expand and enrich relationships. The mobile app is the new branch, and a good service provider can help your financial institution realize its transformative potential.

Understanding and adopting Splunk

Splunk has been a trend in the industry for quite some time, but what do we know about its use and the market Splunk is targeting?

Splunk comes from the word “spelunking”, which refers to the activities of locating, exploring, studying and mapping.

  1. Data indexing: Splunk collects data from different locations, combines them and stores them in a centralized index.
  2. Using indexes for searches: the use of indexes gives Splunk a high degree of speed when searching for problem sources.
  3. Filtering results: Splunk provides user with several tools for filtering results, for faster detection of problems.

For more than a year I have been experimenting with Splunk in several facets: security, storage, infrastructure, telecom and more. We at ESI have a very complete laboratory which allowed me to push my experiments.

In addition to using all these amounts of data, I used open data to experiment with Splunk’s ability to interpret them.

I tested the open data of the site “montreal.bixi.com”; this is raw data formatted as follows:

Start date –  Start station number –  Start station –  End date –  End station number –  End station –  Account type – Total duration (ms)

With this data, we are able to find the most common routes, estimate the average duration of a trip, the anchorage points most requested for the entry or exit of bicycles.

For the operations team of the service, this provides real-time or predicted for the next day which anchors should have more bicycles, and mostly where these bicycles will go. They could predict the lack or surplus of bikes in the anchor points. If data is collected in real-time, alerts could be issued to indicate potential shortage or surplus in the anchor points. Thus the system facilitates planning and allows to be proactive to meet demand, rather than reactive. We would even be able to detect an undelivered bicycle; for instance a bike that has not been anchored for more than 24 hours could issue an alert, so the operations team attempts to trace it.

For marketers, one might think this data is useless, while the opposite is true; the same data can be used to put in place potential offers to attract customers, since we have the data that give the time of departure and arrival, time of use of the trips, and the most used routes. One can thus know the most used time slots and make promotions or adjust the rates according to objectives of traffic or customer loyalty.

For the management, open data unfortunately does not give the price of races according to the status of the users (members or non-members), but the beauty of Splunk is that one can enrich the collected data with data coming from a third-party system, a database or simply manually collected data. Management could then obtain reports and dashboards based on various factors, such as user status, travel time, days of the week, and much more. We could even make comparisons with previous months or the same month of the previous year. The applications are virtually limitless with data that resides in Splunk: the only limitation is that of our imagination!

These are of course fictitious examples made with available open data, but which could be real with your own systems and data.

The collection of information from a website can provide visibility for all users of a company, operations receive system overload alerts, marketers get information about the origin of the connections to target their campaigns based on this data, management gets a view of the user experience, as well as performance metrics that confirm SLAs.

Whether it is security, operations, marketing, analytics or whatever, Splunk can address your needs. In addition to the 1,200 applications available in its portal, you can create your own tables, reports, or alerts. You can use their Power Pivot to allow people to easily use the data and build their own dashboard.

The platform is easy to use and does not require special expertise: you only need the data there.

Do not hesitate to contact ESI for a presentation or a demo; it will be my pleasure to show you how to “Splunk”.

Guillaume Paré
Senior Consultant, Architecture & Technologies – ESI Technologies

What about Big Data & Analytics?

After the “cloud” hype, here comes the “big data & analytics” one and it’s not just hype. Big data & analytics enables companies to make better business decisions faster than ever before; helps identify opportunities with new products and services and bring innovative solutions to the marketplace faster; assists IT and helpdesk in reducing mean time to repair and troubleshoot as well as giving reliable metrics for better IT spending planning; guides companies in improving their security posture by having more visibility on the corporate network and identify suspicious activities that go undetected with traditional signature-based technologies; serves to meet compliance requirements… in short, it makes companies more competitive! One simply has to go on Youtube to see the amazing things companies are doing with Splunk for example.

BIG-DATA-1I remember when I started working in IT sales in the mid 90’s, a “fast” home Internet connexion was 56k and the Internet was rapidly gaining in popularity. A small company owner called me and asked “What are the competitive advantages of having a website?” to which I replied “it’s no longer a competitive advantage, it’s a competitive necessity” and to prove my point I asked him to search his competitors out on the Internet: he saw that all of his competitors’ had websites!

The same can now be said of big data & analytics. With all the benefits it brings, it is becoming a business necessity. But before you start rushing into big data & analytics, know the following important facts:

  1. According to Gartner, 69% of corporate data have no business value whatsoever
  2. According to Gartner still, only 1.5% of corporate data is high value data

This means that you will have to sort through a whole lot of data to find the valuable stuff that you need to grow your business, reducing costs, outpacing competition, finding new revenue sources, etc. It is estimated that every dollar invested in a big data & analytics solution brings four to six dollars in infrastructure investments (new storage to hold all that priceless data, CPU to analyze, security for protection etc.).

So before you plan a 50,000$ investment in a big data & analytics solution and find out it comes with a 200,000$ to 300,000$ investment in infrastructure, you should talk to subject matter experts. They can help design strategies to hone in on the 1.5% of high value data, and reduce the required investment while maximizing the results.

Charles Tremblay, ESI Account Manager

The greatest IT confusion ever?

Does it even beat Y2K? It’s been a year now since I rejoined the IT integration industry. When I left it in 2003 to focus on PKI technologies, it was still the good old days of client server IT infrastructure right after Y2K and the dot-com bubble burst. For a year now I have been trying to understand clients’ challenges to see how I can help. For a year now I have observed my clients trying themselves to understand the mutations that appear to be changing the IT industry and how it affects them not only on a business level but also on professional AND personal levels as well. I find them fearful and closed. Witnessing this, I told a colleague of mine “it seems our clients are capable of telling us what they don’t want but rarely have a clear vision of what they’re aiming for”!Trending concepts
Big data, the internet of things, stuff called cloud, anything anywhere anytime on any device, the software defined companies etc. – all these new terminologies are being bombarded to our clients and are supposed to showcase the many new trends in the industry. I have recently been to a seminar where the audience was separated in three categories: traditional IT folks who resist these changes and new trends because they reshape traditional IT infrastructure and thus may even jeopardize their job definition or security, new line of business managers who embrace change and are shopping for apps that get the job done and high management who talk the numbers’ language (growth percentage, market share and other measurable KPIs) with whom you need to be able to prove ROI (not TCO this is the IT folks’ concerns).

And there we have it: widespread confusion and fear. Y2K all over again? People forget, BI has been around for a while, so has the Internet, thin client environments, databases etc. It’s just happening on a different scale and the challenge remains to bridge the gap between corporate and business objectives as defined by high management, finding the right tools and processes to get the job done by line of business owners and IT that still has an important role in solution selection, integration and support be it on site or off site.

My challenge over the last year has been to overcome those fears so as to allow my clients to have open discussions on their business objectives and avoid the use of buzz words to refocus on “where do you want to be in three to five years as a company, what IT tools will be required to help you get there and what are the ones I can help you with”.

Charles Tremblay, ESI account manager