By now most individuals have heard of ‘big data’ in some shape or form at a business level, and key decision makers have been busy determining what value they can derive from an organisation’s data, and how much budget should be allocated to manage this task. It’s not whether big data is important, but how the data should be managed and prioritised.
Big data was originally a conversation that began within IT teams, struggling to manage and store the mass of information as a result of daily business operations in a more online and connected world. Since the phrase was originally coined, it has now been cemented as a priority among boardroom agendas as executives realise the potential business value that an organisation’s data contains.
This is particularly true for financial institutions – a big data sector that arguably stands to gain more from the data explosion than any other industry. According to a recent study commissioned by New Vantage Partners, the conversation is further along with financial services organisations (FSOs) than most other industries in making use of predictive analytics.
The management of big data and predictive analytics go hand in hand. Traditionally, and certainly for banks and FSOs, data storage has been purchased on an initial cost basis (CAPEX) with little regard being paid to the annual costs of items such as support and maintenance, IT staffing, power and the hardware and software needed to accommodate growth.
Big data by numbers
Of all data in the financial services industry is unstructured
Of FSOs are already using big data and analytics
Now, we are seeing numbers of organisations move beyond the hype, implementing big data analytics that help answer real business questions. Earlier this year, Intel made some noise about how its early forays into the space had resulted in as much a $8.94m payout, and the New South Wales government was noted for having rapidly adopted analytics as a result of its data centre consolidation programme.
In order to benefit from big data, organisations first need to better understand their unstructured data, and how and where it functions within the company. Typically, it is found in silos, and across multiple applications and platforms.
Looking to address this issue, ‘Data Defined Storage’ is an emerging category that unites application, information and storage into a single architecture, placing data at the centre of the equation. This enables data to define the architecture rather than vice versa. Users, applications and devices can access a repository of captured metadata. Once this data is available and transformed into information, the organisation can access actionable business insights, supported by an infrastructure that is both flexible and can scale in parallel with data volumes.
Banks and other FSOs are turning to big data, using insights taken from daily transactions, market feeds, customer service records, location data, and click streams to carve out new business models and services to transform their go to market strategies. Between 60 to 80 percent of all data in the financial services industry is unstructured, which causes major cost and compliance challenges, increasing business risk and making it difficult for organisations to gain value from their data.
These challenges can be resolved by implementing an infrastructure based on data defined storage – empowering organisations to look at their data as an asset instead of as an ongoing cost centre.
Knowledge into power
By recognising data defined storage as a new approach to managing, protecting, and realising value from large amounts of data, users and applications can gain access to a central repository of captured metadata and data.
In order to benefit from big data, organisations first need to better understand their unstructured data
With this knowledge, organisations are empowered to access, query and manipulate the critical components of the data, transforming it into business-ready information that can answer vital business questions, as well as deliver new insights not previously possible. Data defined storage also provides a flexible and scalable platform for storage of the underlying data.
Aside from providing answers to important business questions, there are many other benefits for FSOs, particularly when it comes to compliance, information governance automation and unification of data. By improving and automating information governance processes such as the indexing of data, data classifications, tagging and improved corporate compliance, FSOs increase their effectiveness.
This is realised through streamlining business processes to improve search capabilities, conducting early case assessments and other enterprise data-centric activities. The availability of regulatory compliance reporting allows organisations to stay one-step ahead of regulatory requirements and ensure transparent communication with teams, offices and relevant stakeholders.
As financial data flows into organisations, users can automatically separate the different log data that is generated by the trading platforms as flat text files, and dynamically assess content and type. Then, based on its business value, they can automatically separate and tag data types such as trade log data, relevant market data necessary for best execution retention, relevant market ticker data, and generic ticker data from irrelevant markets.
Each of these different data types have various business values, and can be deployed for multiple purposes, ranging from tracking and processing trading activities and satisfying regulatory demands to driving predictive analytics for future trading. The data can either be saved for long-term retention on tape, or destroyed if it is useless, like generic ticker data from irrelevant markets.
FSOs often overlook the ability to monetise unstructured data within the business. This data contains the sum total of all knowledge within the enterprise, which holds value to third parties as well as improving processes internally. By implementing a data defined storage infrastructure, FSOs are able to mine the net worth of their data and manage through data-in-place dash boarding and analytics. This creates potential cost savings and increases a competitive advantage.
The benefits of big data
For the last few years, there has been a lot of talk about big data and its potential value to business. Looking ahead in 2014, we will begin to see true success stories emerging as organisations begin to make good on their quiet preparation and investment to uncover the value of their data.
3 big benefits
Improved business efficiency
Reduced business risk
Enhanced business agility
Delivering mission-critical business value is most certainly linked to advanced data strategies that can address the spectrum of challenges and opportunities that are dictated by unstructured data. According to a survey by the University of Oxford and IBM’s Institute of Business Value, a massive 71 percent of financial services companies were found to already be using big data and analytics. As a result FSOs have realised that data is critical in delivering a competitive advantage in an industry that continues to rebuild after a worldwide financial crisis.
As businesses of all sizes look to optimise data as a strategic asset, the goal is to make data management invisible to end-users. To use an analogy, most car drivers are not interested in how the engine functions, but rather are only concerned with what happens when pressure is applied to the gas pedal. With a data defined storage solution, the equivalent of the car is an application that provides a unified approach for compliance and search while enabling security – and all at the data level – not the device level.
By embracing data defined storage, FSOs and other organisations will be able to benefit from three core business benefits. Firstly, improved operational efficiency for reduced total cost of ownership by up to 80 percent over time; secondly, reduced business risk by addressing data security and information governance challenges. Lastly, it will enhance business agility and decision making for improved revenue growth.
The data-driven world we live and work in today demands a new way of managing and storing data. Following the financial crisis, FSOs must also adhere to a changing regulatory environment that looks to better protect businesses and their customers from data privacy and security threats. Organisations must better utilise available technology to help improve operational business efficiencies and maximise knowledge gained from critical business data.
Smart CEOs, CIOs and the new emerging role of Chief Data Officer are already working on how they redefine the way in which they hold data within an organisation. Whether they look to build in-house or work with a trusted partner, they need a technology solution that can be deployed with their existing technology infrastructure and applications, grants access for various access levels and enables a dashboard of real-time, data-in-place analytics.
With a true visualisation of business data, FSOs will be able to offer more tailored services, based on better insights and understanding of the industry and their customers. Designing storage with data at its heart also lowers the total cost of ownership for FSOs.
At a time when IT budgets are being squeezed across the board, investing time and budget into a data defined storage infrastructure will resolve many challenges and provide a sustainable competitive advantage, all in one simple implementation. On-track CEOs will ascertain who they can identify to help them better manage and gain value from data.
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