Banks Leveraging Big Data to Increase Customer Reach

Banks are beginning to catch up to other industry's use of "Big Data" as customers' expectations for more refined and customized services have increased due to experiences from venues such as Amazon and Google. In the past, at all levels of banking, insight on a customer's needs and relationships were strengthened were gained through in-person meetings at the local country club, places of worship, lunch meetings and other physical spaces. Now, increasingly, as consumers' commercial and leisure activities have increased beyond the brick and mortar of shopping malls, arcades and record stores, they have filled the void with the digital space. Banking's foray into that arena is simply an offshoot of filling this void.

In a recent article, Big Innovation in Banking, by Bryan Yurcan,  it is noted that banking has grown its presence in the retail consumer space through various mobile banking applications. Many readers over the age of 30 may remember a time when receiving a check required going to the bank, signing it and cashing it in. These days, however, one can digitally scan the check with their phone's camera, where the app saves a digital image of the check, which from there, is sent wirelessly to a database at the bank that rectifies the legitimacy of the check within seconds to enable the customer deposit. Someone who fell asleep in a coma in 1993, only to awake in 2013, would be blown away.

This proliferation of banking outside of the brick and mortar portends great opportunities for the growing consumer classes of emerging market countries. Many of the emerging market consumers have been previously credit constrained due to physical location and lack of banking infrastructure. Given cell phones are more widely used in emerging countries than landlines and cars, the ability to expand credit proliferation through digital mobile computing will enable a more productive and wide allocation of credit to these growing consumers. This will add a tremendous boost to GDP per capita and resulting opportunities for advancement within these countries.