The barriers to successfully harnessing big data in financial institutions
Today, the biggest barrier that buy and sell-side institutions must overcome is the need to adapt structurally from what worked in the past to what is needed now. Banks for instance, are typically organised along product lines with their own technology infrastructure. Entire systems that begin with the customer, include the banking applications and then right out to market utilities, are all organised along a line of business.
In the near term, it is unrealistic to believe that banks will be able to redesign and upgrade these applications to unify their data. The danger in trying to work around this constraint is that they will add new layers to their systems, further increasing the complexity in their architecture. And yet again, as with many areas of emerging technologies, the consistent theme is that banks are short of the key skills needed to harness the potential of big data.
Another barrier is delivering the insight gleaned from big data to the end users. By definition, big data is a problem for machines rather than humans. However, making the data useful will often necessitate that it is presented in a form that can be understood by humans. For this reason, data visualisation will be a significant area of research and a beneficiary of the needs of users.
Furthermore, the value created by bringing together the vast amounts of data generated results in new problems. This is due to the increasing threats posed by cyber security and also the need to manage appropriate access to the data by employees. To solve this data entitlements will be a necessary part of the solution. As the problem of collecting and using data is solved, it will be important to secure it and manage how it is used and by whom. Ensuring that employees have appropriate data entitlements will become a core function.
What is obvious is that to overcome these barriers and seize the opportunities described earlier, firms will need a clear vision of what they want and a strategy to get there.