Since the volume of financial data is exponential, this process of data creation is digital, changing at a faster pace than the traditional method of converting information into a format that can be stored and processed in a data center.
More than half of all data created in the world today is unstructured data, according to a report by Reuters Institute and KPMG.
Unstructured data includes structured and unstructured documents, images and videos, audio, sensor data and social media interactions.
With the rise of big data, the financial industry has looked to use this raw material to create financial models, with the ultimate goal of using a combination of information to gain insights about a customer’s behaviour and, ultimately, anticipate the behaviour of that customer.
How Big Data Has Changed The Banking Industry
Big data has already begun to impact major financial institutions. A 2015 report from Citibank and Morningstar, found that the largest U.S. banks have the greatest capability to use data and analytics to identify correlations and predict future financial performance.
The report also pointed out that big data can be an asset as opposed to liability since banks will have more tools to drive more informed, strategic decisions that lead to more profits.
How Big Data Is Changing The Financial Industry
Big data in finance refers to the petabytes of structured and unstructured data that can be used to anticipate customer behaviors and create strategies for banks and financial institutions.
The Challenges Of Big Data
Big data has the potential to revolutionize the financial sector, but many questions remain unanswered. What is big data? What is a petabyte (PB)? What is a terabyte (TB)? What is a petabyte store? What is a terabyte of data? Where do you store the data?
The answer to these questions is stored in a diverse set of organizations, including universities and companies such as Google, Amazon, Microsoft and IBM, all of which have financial data and/or are working with financial institutions.
Big data in finance can benefit a business for many reasons. It helps banks make more money, invest in new technology, and improve their customer experience.
Big data and the benefits it brings to banks and the financial industry are far from over. The use of big data in finance will continue to grow and become the main focus for more institutions in the near future.