Financial Services

Retail banks and big data

October 23, 2014

North America

October 23, 2014

North America
Frieda Klotz

Deputy editor

Frieda Klotz is a deputy editor at the Economist Intelligence Unit, focusing on healthcare, the pharmaceutical industry and technological innovation. Before joining the EIU Frieda worked as a journalist for six years, writing for publications such as the New York Times, the Irish Times, the Daily Telegraph,  the Guardian, the Chronicle of Higher Education and strategy + business magazine. Frieda published a book with Oxford University Press in 2011. She holds a doctorate in literature from the University of Oxford and an undergraduate degree from Trinity College, Dublin.

 

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More than half of senior retail, commercial and investment bankers say they lack sufficient data to support robust risk management. This report, sponsored by SAP, looks at how banks are using Big Data to improve risk management and compliance performance.

Report Summary

Despite the growing volume and complexity of data due to the spread of digitization, multiplication of channels and demands from regulators, there is still not enough information for banks to support robust risk management.

According to this study, sponsored by SAP, more than half of senior retail, commercial and investment bankers say they lack sufficient data to support robust risk management. But given this increasingly complex landscape, what are the potential solutions?

Two problems come up again and again with retail bank data. First, it’s historical. And second, it’s incomplete. 

-Ozgur Kan, Leader of Berkeley Research Group’s credit analytics practice and former head of GE Capital’s credit methodology Function.

Research methodology

In the summer of 2014, the EIU conducted a global survey of 208 banking executives, with sponsorship from SAP, seeking insights into how banks are using big data to improve risk management and compliance performance.

More than half of survey respondents were C-level or equivalent executives, and the remainder held SVP/VP/Director positions in risk management (63%) or regulatory compliance (38%). All respondents work for retail, commercial or investment banks. North America, Europe and Asia-Pacific each account for about one-quarter of the survey sample, with the remainder coming from Latin America (10%), Middle East (8%) and Africa (7%).

All of the respondents’ organisations have annual revenues of more than US$500m. By size, they are roughly equally divided into three groups: the largest banks ($5bn or more in annual revenue), small banks ($500m to $1bn in annual revenue) and those falling between the two groups. 

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