Big data and internet proliferation are creating great opportunities in the financial sector, but firms must move quickly to develop innovative reference data solutions if they are to take advantage of these opportunities and remain competitive.
Presenting at an ISITC Europe reference data briefing, Ken Price, vice president of sales at data management specialist Strevus and former co-founder and CEO of Avox, considered how the global growth of internet use and development of big data may influence reference data management in future.
Price reported statistics published in a May 2013 Internet Trends report from venture capital firm Kleiner Perkins Caufield Byers showing 2.4 billion internet users in 2012 and 8% year-on-year growth, driven predominantly by emerging markets. Statistics from www.internetstats.com highlight these markets, with Africa, by way of example, showing an increase of over 3,000% in internet users from 2000 to 2012 and now hosting over 167 million uses. In the same period, internet use in the Middle East rose by over 2,000% to create over 90 million users.
Considering these statistics, Price highlighted the extent of internet connectivity and suggested that, from a reference data point of view, it is time to increase attention given to regions such as Africa and the Middle East.
Turning to big data, Price quoted IDC statistics suggesting that the amount of global digital information that was created and shared rose nine-fold to nearly 2 zettabytes – a zettabyte is a trillion gigabytes – in the five years to 2011 and could reach towards 8 zettabytes in 2015. Data variety and complexity is increasing, while information assets such as people and companies, products, look-up data and integration adapters continue to add to the volume. Allied to big data are the analytics that give meaning to the data and provide opportunities for data collaboration and process improvement.
Price argued that embracing big data and rising internet use can deliver significant benefits including meaningful reputation and trust scores, more accountable data quality, robust and real-time benchmarks, and the ability to more quickly identify trends, symptoms and opportunities. But he warned that financial firms need to acknowledge change and move quickly to capture these benefits.
Challenges along the way include tearing down the cost of regulatory compliance, which can consume 85% of IT budgets, and wising up to emerging niche companies such as Lending Club, bitcoin and Chase Mobile banking that use hosted services to set up quickly and infiltrate traditional markets.
Price noted that the industry is moving forward, but pointed to issues in client outreach that are holding back development, such as a lack of structure in client on-boarding and workflow, and companies’ ongoing commitment to paper documents and wet signatures. The answers here are web portals that empower users, mobile access to services, electronic validation of forms and electronic signatures. These solutions can deliver an improved customer experience, efficiency gains, better data quality and an accumulation of valuable data.
With this type of progress in process, Price looked to a future in which financial firms integrate know-your-customer, anti-money laundering and client on-boarding with social media such as LinkedIn, Facebook and Twitter. A future where automated cross referencing leverages data use patterns and becomes highly reliable, and where collaboration will extend to proactive sharing of legal opinions, regulatory interpretations and compliance standards, data feed adaptors and applications. Similarly, regulators will collaborate more productively with firms in their jurisdiction and software-as-a-service and data-as-a-service will become the norm. The regulatory burden, Price concluded, can be converted into an opportunity to improve infrastructure and the customer experience, while the development of innovative reference data solutions can help financial firms remain cost competitive.
Subscribe to our newsletter
