How Big Data Sector Changed the Banking Sector (2024)

Unlike the early days when everything was done manually, these days the evolution of technology has changed how different sectors perform. One of those industries that have been impacted by the growth in technology is the banking industry. During the early days, the sector handled communication manually which greatly limited the sector. It was difficult for the financial institutions to efficiently transfer data from one point to the other and hence holding an account those days was ridiculously expensive.

As time went by, growth in technology hit the data sector and everything started to change. The banks could now use technology in gathering and saving clients data, a move that improved the efficiency in which the sector operates. As growth in technology continues to grow, the banking sector is offering their services online, hence making it easy for anyone to access their services from wherever. Explained below are some major changes we are experiencing in the banking sector.

Delivering Services in the Sector has improved

Data in the banking sector is very substantial such that it is difficult to handle it manually. Just think of this, what could happen if an account number has to be searched manually in files? We could have unending long lines in banks. But this has been digitized as the data is now stored in computers that an entry of the account number shows all the details of an account holder in few seconds. This has made it easier for the customers to get the services efficiently. Opening a bank account has also been made cheaper and available to everybody in the world. One can even use a mobile phone to access banking services, and this has spurred development of financial institutions.

Management of Arising Risks

Detection of frauds in banking institutions has been made easier and quicker. Early detection of frauds is a risk management tactic as it is easier to make a follow up hence reducing the number of risks faced. The significant data sector finds and brings into display information on frauds. Some banking institutions have come up with their apps that help customers to monitor activities on their cell phones such as transfer of funds, tracking their transactions and receiving notifications. This has built trust with the customers hence the recent development in the banking sector.

Global Reach

Online technology has changed the way banks operate entirely by introducing critical players in the sector. Banks now offer their services across the world. Information on the cloud has made it easier to access information at any time anywhere in the world. The growth of businesses and firms has led to the growth of IT thus increasing the amount of data shared.

Enhanced reporting by customers

Banks can now receive numerous customer requests and needs, and by using the significant data available, the banks can now efficiently serve them. This has reduced the cost and increased revenue generation by more significant amounts. The banks are also able to fulfill the customer’s exact needs thus they are more helpful than before.

Segmentation of customers

Big data has brought into light customer spending habits and thus simplifying the task of fulfilling their requirements. The banking sector is also able to group clients based on preferences and choices of services accessed, and therefore it is easy in advertising as the banks know the target groups of specific advertisem*nts.

Concerns about data security

Technological development has put banks at risk of hackers. Phishing is one way used by hackers to steal money from banks something that almost impossible back then. The banking sector is also working tirelessly to improve their cybersecurity measure to ensure that the client’s data and funds are safe.

All in all, the data sector has increased business transactions across countries and as well as continents. This has led to the development of foreign trade which has hence helped in the event of third world countries through foreign investments.