In the contest of the very revolution that big data are bringing also in the banking world, the digital system is overcoming the traditional distinction between product- and process-innovation. Big data are the basis of the new concept on how to “be a bank”.
During the last year, the redefinition of the industry rules and the Fintech investments ($ 19 billion in 2015) provided a boost to financial innovation that had never been so strong and effective before.
Until a few time ago, the digital was only an additional channel to the face-to-face the market. Nowadays, it is running the bank’s production chain – including the back-end system – and is giving the opportunity to experiment with new organizational logic.
Big data – and their central position and valorization – are no more an instrument for only reporting or compliance functions. They are the driving force for business development and customer services.
If the use of big data is limited to its original functions, it will help the exploitation of the enormous amount of information available to the bank in terms of quantity and of effectiveness. This will help in detecting correlation between the data, building predictive models and monetizing customer information.
Such a kind of business has two models: Bank of America, for example, registered a patent for a method that allows customers to monetize the use of their data. On the other side, there are companies that create marketing studies based on their data and sell it to intermediary service companies. Furthermore, banks can use big data for anti-fraud.
When the use of big data includes the relationship with the customers, this technology can reach its revolutionary objective. The technological evolution that has pushed the customers away from the bank, physically intended, is now an instrument to create a connection between the clients and the bank granting a better quality and safety.
Furthermore, the customer has now achieved a different position from the past: he is an active and prepared actor who pretends an equal information.
Given all these facts, the “3.0 bank”, thanks to the Big data technology, is that where customers are not only one of the two actors of the dialogue, but a player of a network with its own room of maneuver.
There already are several cases of companies leading towards this direction. “Personology”, by Royal Bank of Scotland, alerts customers when their interest rates on mortgage become too expensive or if they paying unnecessarily existing services. Karrott, from USA, enables loans of up to $ 35 thousand in a few minutes. And EY has an application that analyzes the customers’ buying behaviors to suggest them goods or services with related bank loans.
A last – but not least – aspect of this revolution, is the digitization of the coin, one of the major challenges faced by the banking industry.
If banks desire not to be left out of the financial future, they have to look with increasing attention to the bitcoin and certification systems such as Blockchain, the protocol that enables the use of virtual currency and collects the memory of all the transitions made in bitcoin since the first use (2009) until now.