Big Data Analytics for Banking, a Point of View

© 2014 IBM Corporation
@pieroleo www.linkedin.com/in/pieroleo
Big Data and
Analytics for
Banking
A Point of View
Pietro Leo
Executive Architect
IBM Italy CTO for Big Data Analytics & Watson
Member of IBM Academy of Technology Core Management Team

“...Digital Transformation
and its main enabling technical
factor Big Data & Analytics is
a Banking Industry
Transformation engine...”..

Digital natives
Data
Smart
Machines
New
Competitors
New Products
Banking Industry Transformation Pressures
Digital Transformation
(Big Data is part of it and a main enabling factor....)

Digital natives
Data
Smart
Machines
New
Competitors
New Products
Banking Industry Transformation Pressures
The age of new customers
• Demand new ways to interact
• Decide where and how buying process begins and ends on their terms
• Loyalty and stickiness is a function of convenience, gratification and
value in every interaction
• Customers demanding a more immersive and engaging experiences
The age of new information
• > the new natural resource
• 80% unstructured requiring new ways to mine and draw insights
The age of new channels
• Mobile is as the primary buying and paying platforms
• Smartphones, Smartwatches, Google Glass, SmartWearables,
eWallets,
The age of new competition
• Alibaba, Facebook, Amazon, Twitter, PayPal, Motif, Monetise etc.
• Threat to deposit base, SME loans and payments
The age of new products
• Growth of convenience driven Non-Banking Products
• Earning commissions from merchants for aggregating their products
and services for the convenience of their customers

Digital natives
Data
Smart
Machines
New Products
Threat to deposit base,
SME loans and payments....
New
Competitors

From a transactional to a sub-transactional era
Yes!
Just ONE Transaction
path goes to the end in
thousands and to
complete that path tens
of decision points were
considered. Right now
we store and analyze in
our transactional
systems just the
transaction end points.
Buying Decision Labyrinth
Buyer ….Win!!!

The age of new competition: the power of a sub-transactional
knowledge
It's an invitation-only loan product offered exclusively to Amazon Sellers. The Amazon
loans offer very competitive 10.9 - 12.9% interest rates and no pre-payment penalty.

The age of new competition: Alibaba
Sept. 29, 2014 1:56 a.m. ET
Sep 24, 2014
Source: http://online.wsj.com/articles/alibaba-affiliate-wins-approval-to-start-private-bank-1411970203
Source: http://www.bloomberg.com/news/2014-09-23/alibaba-arm-aims-to-create-163-billion-loans-marketplace.html

Digital natives
Data
Smart
Machines
New Products
The Experience Economy and
the Data Economy.......
New
Competitors
Consumers are open to share their
personal information, with the exception
of financial data, when there is perceived
benefit..... and YOU can

Consumers are open to share their personal information,
with the exception of financial data, when there is
perceived benefit
Consumer Maintains Control of Data
What is your willingness to provide information in exchange
for something relevant to you (non-monetary)?
33% 30% 28% 26% 15%
45% 43% 21%
30% 30%
25% 27%
28% 29% 28% 28%
41% 41% 44% 46%
63%
100%
80%
60%
40%
20%
0%
Media Usage
(e.g. Media
channels)
Demographic
(e.g. age,
ethnicity)
Identification
(name,
address)
Lifestyle (# of
cars, home
ownership)
Location
Based
Medical Financial
Completely Disagree Neutral Completely willing
Source: IBV Retail 2012 Winning Over the Empowered Consumer Study n= 28527 (global) P04: What is your willingness to provide
information for each of the following items if [pipe primary retailer] provided something relevant to you in exchange?

Source; https://datacoup.com/docs#how-it-works

Smart
Machines
Digital natives
Data
New Products
NEW channels and
NEW kind of assistance....
New
Competitors
Source: http://www.youtube.com/watch?v=lPgp4A1vxls

Digital natives
Data
Smart
Machines
New
Competitors
New Products
The need and the new value: buid a
360°Integrated Customer View....
360°Integrated
Customer View
with TRUST!

“…Big Data & Analytics
is proving value when it is
part of a
closed-loop
Business
action ...”..

Instruction 1: I can partner with you, Trust me!
Customer info
Indexed 3rd party
information related to
customer
Customer search: draw in all
related records: J Robertson,
Janet Robertson, Jan Baker
Enabling a complete
purchase history, including
Baker records
Customer’s Products
Unstructured internal
information related to
customer
Activity feed displaying changes
in real time
First Step and need: build 360° Customer View
© 2014 27 IBM Corporation
giugn

Instruction 2: What is important to know about a customer?
The “influence” wheel helps frame the problem in terms of what we need to know about a customer
Transaction data
allows us to know
what behaviors we
can observe at
purchase time
Not all behaviors can be
observed in a transaction
so we deploy a social
listening strategy in order
to capture some aspects
of a customers lifestyle
and how products &
services may fit into that
lifestyle
External forces may
impact the way
customers behave,
so we have to collect
data to simulate local
conditions that may
affect purchase
behavior
Community
Conscious
Event
Drivers
Competitors
Weather
My Media Channel
Preferences
My Day Part
My Need State
My Lifestyle/
Demographics
Beverage
Behavior
Message
Relevance
Rewards
Program
In-Store
Experience
Employee
Influence
Food
Behavior
My
Occupation
My Finances
© 2014 17 IBM Corporation

“How Big Data &
Analytics is evolving and
scaling down the
underline IT
complexity ….”

Need to cope and satisfy both with technical and business
views
New / Enhanced
Applications
All Data
Machine/Sensor
Policy
Broker
Claims
Social Media
Location
Litigation &
Other 3rd party
Better and
Individual
Pricing
Enhanced 360
Degree View
Claims Analytics
& Real Time
Fraud Detection
Batch or Real
Time Next Best
Action
Information
Sharing &
Transparency
Big Data & Analytics Strategy, Integration & Managed Services
Big Data & Analytics Platform
Real-time Data Processing & Analytics
Landing,
Exploration
and Archive
data zone
Deep
Analytics
data zone
EDW and
data mart
zone
IBM Big Data IT Blueprint
What is
happening?
Discovery and
exploration
Why did it
happen?
Reporting and
analysis
What did
I learn,
what’s best?
Cognitive
What could
happen?
Predictive
analytics and
modeling
What action
should I
take?
Decision
management
Operational
data zone
Information Integration & Governance
MMMaaaccchhhiiinnneee///SSSeeennnsssooorrr

Marketing Sales Finance Operations HR IT
Communication & Collaboration
Visualization & Storytelling
Descriptive, Diagnostic, Predictive, Prescriptive, Cognitive
Data Access & Refinement
Visit WatsonAnalytics.com
and get started for free
Marketing Sales Finance IT Operations HR
Instruction 3: A new CAMS+
“native” application paradigm is
starting: the case of IBM Watson
Analytics
Analytics
Watson Analytics
CClloouudd
MMoobbiillee RReeaaddyy SSeeccuurree
Value:
•Put analytics in the hands of everyone
•Make access to data easy for refinement and
use
•Deliver through the cloud for agility and speed
Prioritizing
Accounts
Receivable
Identifying and
Retaining Key
Employees
Helpdesk
Case
Analysis
Campaign
Planning and ROI
Warranty
Analysis
Customer
Retention
Examles

Pietro Leo
Executive Architect
IBM Italy CTO for Big Data Analytics & Watson
Member of IBM Academy of Technology Core Management Team
@pieroleo
Grazie!

Big Data Analytics for Banking, a Point of View

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Big Data Analytics for Banking, a Point of View