Over the last few years, many of the world’s leading technology evangelists have praised the future of big data. Bill Gates has announced that big data is playing a very important role in protecting American schools and improving healthcare around the world. These views have recently been echoed by the Bank of America.
Bank of America’s Long-Term Focus on Big Data
A few years ago, Bank of America began using big data to improve its customer retention rating. Bank of America has discussed the benefits big data provides to the financial industry.
“With big data technology, it can increasingly process and analyze data from its full customer set.The various sales channels can also communicate with each other, so a customer who starts an application online but doesn’t complete it, could get a follow-up offer in the mail, or an email to set up an appointment at a physical branch location,” a Bank of America spokesperson told Forbes.
Bank of America analysts have discovered other applications for big data as well. They have used data to expedite their financial forecasting. Developing forecasts that used to take months can now be completed in less than a day. Other financial institutions have looked to Bank of America for insights on using big data to improve the efficiency of their own reporting and modeling functions.
Bank of America has also discussed ways that big data is changing other sectors. Last week, they analyzed several big data companies and the impact they will have on the economy. Their analysts predict the following big data stocks will surge in the coming months:
- Alibaba
- Alphabet (holding company for Google)
- Amazon
- IBM
- Salesforce
- SAP
- Splunk
There are a number of reasons these companies are a great bet.
“We are living in an exponential age where ubiquitous connectivity and decreasing cost are leading to the digitization and datafication of most activities,”states Bank of America equity strategist Beijia Ma.
Here are some predictions Ma and his colleagues have made:
- AI will be the single biggest driver in the technology sector within the next decade.
- The big data industry will be worth $210 billion by 2020.
- About 90% of the world’s data was created over the past two years.
Ma and his colleagues claim that the sky is the limit with big data. It is transforming the future of customer service, business analytics, supply-chain management, financial modeling and every other aspect of business.
Other Bank Follow the Lead
As second largest financial institution in the United States, Bank of America has led the industry in many ways. Plenty of other banks have developed similar technology strategies to provide more timely, cost-effective and reliable service to their customers.
EquiFax created a blog post praising Bank of America, Citi and Great Western Bank for using data effectively. Great Western Bank grew by 300% between 2008 and 2014, largely due to its effective use of data.
EquiFax states that the banks have used big data in the following ways:
- Tracking customer financial histories
- Identifying mortgage policies of customers that may be at risk of leaving for other banks
- Improving communication between customers, local branches and corporate headquarters
- Improving actuary models to offer fairer policies to customers
- Identifying the most valuable customer groups to target
Don Callahan, manager of internal operations and technology at Citi, told the Wall Street Journal that the bank has used big data to better reach corporate customers, since its corporate business line is growing steadily. “We think this information could show signs for which might be the next big cities in emerging markets,” Callahan said.
Citi and Great Western Bank will probably adapt new technology to reflect that of Bank of America in the future.
Big Data Will Continue to Shape the Future of Bank of America
Every major company in the financial industry is using big data, but Bank of America is clearly leading the way. They are also using big data to develop new analytics for their corporate customers.
How will Bank of America use big data in the future? Only time will tell, but they are likely to share updates on their website. I will be sure to share any information that I discover.
