Andrew Jennings stated in his latest Bankinganalyticsblog.fico.com that 2013 has been quite a year in banking analytics – regulatory challenges, growth opportunities, new fraud threats, and the surge of mobile as the hot channel for customer engagement. He expects 2014 to bring even more change. Here are his top five predictions for banking analytics in 2014.
Big Data winners and losers exposed. The Big Data hype engine is finally cooling off. Although Big Data will always be part of banking, he believes 2014 will be the year in which Big Data technology consolidation will begin in earnest. The winners and losers will become clear as a “standard” technology stack for Big Data emerges. Ease of use will improve, expanding the opportunity for data analysis beyond the market leaders or the technology savvy in any given industry sector. In the banking sector, innovation will move away from Big Data infrastructure towards analytic tools and applications.
Customer experience will be king. As banks try to accelerate growth, optimizing the customer experience will become the focus at many institutions. In particular, the move toward more web-based and mobile interactions will give banks new opportunities to cultivate more profitable relationships. Banks will increasingly rely on analytics to enhance customer service, improve the relevance and timeliness of offers, personalize communications, and make each customer relationship unique.
No relief from compliance headaches. Banks will focus more resources on compliance in 2014 to avoid unintended consequences that can arise when analytic-based decisioning isn’t managed properly (e.g., conduct risk). In countries like Australia, the U.K. and the U.S., for example, there have been concerns expressed about pricing for financial products that may disadvantage certain groups of consumers.
Experimentation drives breakthroughs. Knowing how to tease out predictive relationships in data or how to search for unknown patterns will be a key determinant of success in 2014. Companies in all industries, including banking, will embrace systematic experimentation to make analytic discoveries more quickly and efficiently. This will drive our next breakthroughs in use cases for analytics.
People, people, people. Jennings says he discussed this topic in the past and he feels it bears repeating. The analytic talent shortage will grow. Recruiting headaches for banks will persist, and salaries for analytic professionals will increase (which could be very good news for people in his line of work). He expects this to remain the case for several years, until one approaches equilibrium in talent supply and demand.
Source: Bankinganalyticsblog.fico.com
