Big data seen as a major opportunity – but also a risk – if not managed properly.
QUÉBEC CITY, Oct. 8, 2014 /CNW/ - Co-ops and credit unions should use big data technologies to help transform their business model if they want a true competitive advantage. According to EY's Global Ready to takeoff report, 20% of businesses that successfully use data outperform their peers by up to 20%.
"The combination of the explosion of data and the rapid development of new technologies capable of storing and processing this information is transforming the way enterprises run their businesses," says Drazen Nikolic, partner in EY's Advisory Services in Germany. "The financial services industry has significant opportunities to capitalize on big data and analytics technologies, but must face the challenge of drawing a coherent picture from infinite bits of information".
In fact, the value of big data lies in the insights that businesses can draw from it, rather than in the information itself. Big data offers huge opportunities for financial co-ops in areas such as customer behaviours, segmentation, fraud detection and credit risk management.
"For example, financial institutions have vast transactional data at their fingertips," explains Nikolic. "This can be leveraged to gain greater insight into individual customer profiles as well as general segmentation."
While big data offers great opportunities, there are also serious risks – including the legal and regulatory hazards relating to issues such as data privacy that can result in breach of trust.
According to Nikolic, enterprises need a holistic and strategic plan for identifying the opportunities, overcoming the hurdles and managing risks in order to secure topline value from big data: "This requires a transformation across the organization, closer collaborations between various functions, and a shift in the mindset of board members."
"There is an increasing volume and variety of data now available, says Nikolic. "Businesses that are able to use analytics to extract value from this data will be the ones able to establish a competitive advantage."
EY is a platinum level sponsor of International Summit of Cooperatives, a biennial gathering where leaders of cooperative and mutualist enterprises get together to discuss their concerns about the current and future business challenges they all share.
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SOURCE: EY (Ernst & Young)
Erika Bennett, [email protected], 416 943 5497; Sarah Shields, [email protected], 604 648 3607; Julie Fournier, [email protected], 514 874 4308
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