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“Big data” is one of the hottest topics in corporate circles, but many companies are finding it challenging to capitalise efficiently on the vast quantities of information generated. One exception is financial service firms who are increasingly using the information to improve their competitive edge.
“The Power of Big Data” was a forum organised by the British Chamber of Commerce for Luxembourg last week. Here is a brief summary of the speakers’ remarks:
The moderator, Antonio Thomas of ManagementPlus, introduced the audience to the definition of big data as “the collection, processing and usage of large volumes of digitized data analysed through powerful software”.
Andia Shtepani, also of ManagementPlus, said that from 1950 to 2009, the industry was largely characterised by a small number of data sources; only structured data came from within the company and analytics typically reported on past events. From 2009, the term “big” data started to appear as a direct result of companies using more external unstructured data, higher data volumes, and most importantly through manipulation of data to predict customer behaviour.
Sébastien Danloy of RBC explained that 90% of the data that is used currently by RBC was created only during the last two years. The bank has put in place a big data solution for its clients that will illustrate trends in performance with respect to the fund benchmarks, for example.
Data privacy is an ongoing concern
Mario Mantrisi of Kneip provided examples on how the new generation of consumers deal with social media platforms and the data they provide on their sites. The concept of ‘what’ versus ‘why’ in terms of product choice has really increased the capability of software providers to look at alternative solutions including block chains. Shtepani mentioned that based on recent studies, regulation in Europe has not been as flexible as in US.
Serge Weyland of BIL outlined trends on how banks engage with big data technology to compete in a market where the peer to peer financing, crowd financing, shadow banking or regulation such MiFID could challenge their current market share. The operating models of banks are changing to deal with such competition leveraging big data analytics.
Several questions were posed by the audience including how to best organise IT systems within a company to make it fit for big data purposes. Shtepani mentioned that it does not matter on the size of the company, and in order for a company to accept unstructured data their internal data systems should be well defined. Additionally, several studies have shown that global companies create big data centres of excellence where they gather all data analysts, she said. The data analysts report to the chief investment officer or chief technology officer instead of their functional manager to remove any bias.
The conference was held on 17 February. More details can be found on the BCC’s website.