North America drags feet on big data says Celent
Despite its potential, the vast majority of financial services firms have still not implemented big data tools, according to new research conducted in North America by analyst firm Celent.
In the report, How big is big data? Big data usage and attitudes among North American financial services firms, Celent argues that big data can provide a significant competitive advantage to early adopters. The research found that of the banks surveyed, 38% are exploring the possibility of big data solutions, 25% are experimenting with such tools, a further 25% are deploying them and 13% already have big data tools and are in a position to expand.
“Most big data projects are an isolated and often uncoordinated line of business-led initiatives that seek specific business outcomes with a traditional non-data driven culture using siloed data warehouses,” says Bob Meara, senior analyst with Celent’s banking group and co-author of the report. “While this approach is an excellent way to develop the technical capabilities to manage increasing data volumes, velocity and variety, it will not produce the step changes in business outcomes that are so sorely needed.”
According to the study, some 60% of firms believe information including big data and analytics holds the key to competitive advantage to a significant extent. However, 40% asserted a small to moderate influence on competitive advantage – suggesting that not everyone accepts the value of big data as a competitive tool.
Of the 24% of banks that had experience of working with big data in a production environment, the bulk of their experience was in projects aimed at improving sales results and reducing operational risks, such as fraud. The results of the survey suggest that where it has been implemented, big data has contributed positively, with 70% of projects reporting that they have met or exceeded expectations.
Though there is no widely accepted definition, big data typically refers to the need for businesses to process and store ever-expanding quantities of information. The lack of clarity over exactly what constitutes big data was also picked up in the survey, which reported 74% of respondents associated it with unstructured data, 59% with large data volumes beyond their current processing power, and 27% with social media.
The Celent survey was based on interviews carried out between December and February and covered 33 financial institutions.