A new survey and analysis surrounding big data among banks and insurers claims that “financial services firms are decidedly not as data-driven as they should be.”
However, there’s a silver lining for insurers: While big data remains trendy and undefined for the most part, the new research from Celent, titled “How Big is Big Data?: Big Data Usage and Attitudes Among North American Financial Services Firms,” indicates insurers are slightly ahead of banks in their use of big data.
Big data maturity levels among insurers are perfectly split, according to the report, with 25 percent falling under each category: exploring, experimenting, deploying and expanding. This means the insurers find themselves a little ahead, as 38 percent of banks surveyed are reportedly still exploring big data while only 13 percent are expanding its use.
Still only 20 percent of insurers indicated having hands-on experience with big data in a production environment; the report adds that the bulk of experience lies with projects aimed at improving sales results or reducing risk/fraud. Even among those with experience, there are many explanations of what, exactly, big data is.
While definitions vary, the predominant line of thought is that big data is semi-structured or unstructured data, and two more popular answers—particularly among those with hands-on experience—was predictive analytics/modeling/real-time analysis.
Not only do financial institutions still have an unclear idea of exactly what big data means, according to the survey, they are also unclear on their expectations. Nearly all respondents (90 of both banks and insurers) think skillful use of big data will define the future winners in financial services; yet somewhat paradoxically, about half of respondents somewhat or completely agreed with the idea that the promise of big data is overblown. Specifically among insurers, the number of skeptics was even higher (60 percent). Meanwhile, more banks are of the opinion that big data “is a trendy term for what we’ve already been doing” (58 percent) and “is too poorly defined to be useful” (42 percent).
The wide variety of opinions and skepticism is taken to be important to by Celent, which concludes that big data experience is closely tied to the value placed on data and its ability to derive competitive advantage. According to the report, early-adopters are embracing a competitive advantage by doing so. Among financial institutions with longevity of experience (more than one year), 70 percent of projects have met or exceeded business case expectations. The survey asserts that, for these institutions, the promise of big data is very real.
