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Big Data, analytics stand as top investment priority for financial institutions


IDC Financial Insights has announced the availability of a fresh report titled, “Best Practices: IDC Maturity Model Benchmark – Big Data and Analytics in Financial Services,” designed to help institutions assess their level of maturity in big data and analytics (BDA) against market and industry benchmarks. Institutions can make use of the baseline to define short- and long-term goals and plan for improvement, prioritise BDA technology, staffing, and other related investment decisions, and uncover maturity gaps— all in the quest to improve or optimise decision making and generate greater business, technology, and operational outcomes.

As stated by Michael Versace, research director, IDC Financial Insights, “In-market adoption of big data and analytics has reached the point where the capabilities and applications these technologies enable are becoming main stream for a growing number of financial services firms. Yet many do not yet have a set of completely mature BDA competencies across the five critical dimensions that are necessary to effectively reduce execution risks and compete with strong business, technology, and operational value propositions.”

The new-fangled report presents benchmark data on the maturity of BDA capabilities of North American commercial, retail, and investment banks; identifies the key capabilities that distinguish institutions whose BDA efforts have met or exceeded their overall expectations from their competitors whose BDA efforts have fallen short; and offers guidance for achieving BDA success. Top-line insights drawn from this research stand as:

A majority of financial enterprises (67 percent) present a “repeatable” level of BDA maturity overall, the third level of IDC Financial Insights’ five-level BDA maturity model. With 12 percent of financial enterprises falling one maturity level below and another 21 percent falling one maturity level above the majority, the emergence of BDA “haves” and BDA “have nots” is likely, making BDA a defining aspect of competitive advantage in a shorter time than previously expected.

Institutions investing in their BDA competencies report a positive correlation between BDA maturity and the successful outcomes of BDA initiatives. High achievers “skew right” on the maturity curve, while low achievers “skew left.” On average, higher levels of BDA maturity lead to better chances of generating value and achieving expected or greater-than-expected benefits.

In the expansive framework of data-driven financial services, the emergence of analytics as the new core of the industry, BDA will remain a top investment priority for the foreseeable future. No stranger to massive, time-sensitive data volumes, financial services is at the epicenter of emerging BDA opportunities in many key areas, including customer acquisition and servicing, market intelligence, and risk, fraud, and cyber analytics.

The highest achievers are obtaining BDA maturity as a multifaceted endeavor across five core dimensions — intent, people, process, technology, and data. Success depends on the absolute level of maturity in each dimension and on aligning the five dimensions at or near the same level of maturity.

The top 10 traits that most distinguish institutions as likely to exceed expectations with their BDA programs cut across all five dimensions. High achievers most distinguish themselves from low achievers with mature BDA process change management, executive leadership, line-of-business (LOB) utilisation of BDA insights, and collaborative cultures among lines of business and analytics groups as well as skills in advanced analytics, data and content management, and management of BDA IT hardware.

More firms today are focused on the strategic use of technology to innovate and enable next-generation services across their value chain, in front-, middle-, and back-office operations. This is the mantra of a value-driven organisation. An enterprise perspective on the use of BDA technology, including the value propositions, risk, and governance, is absolutely necessary in an age where the economic environment continues to place heavy demands spending on risk and regulatory compliance. To help institutions harness the power of BDA successfully, IDC Financial Insights offers insight into the most significant factors that define high achievers with respect to their BDA capabilities and project outcomes.

“Business models in this industry have been data-oriented for decades. But with the adoption of BDA technologies, a new platform for competition has emerged, confronting firms with the complexities of new technologies, skills requirements, and the seemingly endless opportunities to use data in ways not previously possible,” concluded Michael.


Jawed Akhtar

A Journalist by interest and a Music Enthusiast by passion. Wedded to Mother Nature, Jawed indulges his aesthetics in travelling and reading books of varied genres. Having covered News stories for top Dailies in his formative years, that is, he is game for tryst with Technology at Techmagnifier.

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