Big Data is high-volume, high-velocity and high-variety information that requires specialized and innovative forms of storage and analysis for enhanced insight and decision making. Staggering statistics mentioned in prior articles depict the amount of data being generated every day. To give you an idea into the world of Big Data, have a look at the video below:
As this quantity of data grows, it becomes imperative for businesses to use this information to their advantage. Valuable insights derived can enhance decision making, reduce costs, and increase marketing ROI eventually leading to higher revenues and profitability. Further, ‘real-time’ insights and ‘predictive’ analytics can provide a pronounced competitive advantage.
The technologies surrounding Big Data allow companies to do exactly this. This article and its follow ups, will be illustrating how businesses are winning at Big Data and using it to their advantage, taking a distinct case study at a time. This article illustrates the case of Bank of America.
As on July 2012, Bank of America had 57 Million customers, 29 million online banking users and 10 million mobile banking customers. For all those customers, they hold 65 Petabytes of data and they only use 1% of it for analytics at present.
Traditionally, the bank used data analytics to understand its customer based on largely structured data available within the Bank’s database. More recently, however, Bank of America is storing and analyzing a lot of unstructured information about the customer. This refers to the information generated by monitoring customer journeys through websites, call centers, tellers and branch personnel to understand the paths customers follow through the bank and how these paths affect attrition or purchase of particular financial services. This data consists of a combination of website clicks, transaction records, and voice recordings from call centers. Insights derived from a combination of analyses on both the structured and unstructured data provide well defined customer segments that allow the bank to pitch the right product to the right customer, leading to increased revenue. The bank claims to have a relationship of some sort with 1 of every 2 customers in the United States. It certainly knows its Big Data.
How Bank of America is deriving Winning Insights from its Big Data?
The Bank utilizes transaction and propensity models to determine which of its primary relationship customers may have a credit card, or a mortgage loan that could benefit from refinancing at a competitor. When the customer comes online, calls a call center, or visits a branch, that information is available to the online app, or the sales associate to present the offer.
In 2012, Bank of America launched BankAmeriDeals, a program that provides customers with personalized cash back offers based on their spending patterns. This program is offered through its online banking platform and the customer can avoid the hassles of using newspaper cuttings or any external deal websites (such as Groupon). When a customer clicks on the deal, it gets loaded on his debit/credit card and he receives the cash back, the next time he shops at the particular store. Recently, this program was provided on the bank’s mobile app too, with the additional facility to notify customers when they are near a retailer for which they have a coupon. Such programs benefit the business by increasing customer loyalty and swaying customers away from the competitors.
More recently in 2013, Bank of America tracked speech patterns, location, movement and posture of employees at its call center, and based on the data gathered, rolled out initiatives to improve interactions between employees and employers and even office floor plans. They switched from staggered 15-minute breaks to having teams take breaks all at the same time, thereby increasing productivity by 23 percent and team cohesion by 18 percent.
Further, Bank of America made changes to its organizational structure and restructured to form a central analytics group showcasing its commitment to Big Data analytics.
In sum, Bank of America was able to develop a much deeper relationship with a larger set of customers allowing a large bank to provide more customized and flexible solutions and function similar to smaller banks that have the benefit of knowing its customer more personally. In this way, it solved its business challenge of losing its customers to smaller neighborhood banks.
This series will be continued further featuring examples of other well-known global companies. Watch this space!
This blog post has been written by URVI BABLA, Insight Consultant, Brandscapes Worldwide. Urvi is a passionately curious individual who believes in lifelong learning. She is also a travel enthusiast and has explored many diverse regions across the world such as Europe, Middle East and Africa besides India.
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