That figure in the headline should get the attention of senior management at financial services firms around the world. According to a report (PDF) from Booz & Co., financial services firms are “overlooking an opportunity in plain sight” to use the data they collect on customers and transactions to improve their services and add new products.
Booz estimates that the money to be made from commercializing data (read Big Data) will amount to a $175 billion business this year, growing to $300 billion annually over the next three to five years.
There’s no time to waste, the report suggests, because the big money opportunities in Big Data will attract competitors from outside the industry that can use their own customer info to field financial products.
As proof, the authors cite Tesco. The supermarket giant bought out the Royal Bank of Scotland, its partner in Tesco Bank, and later acquired a data mining company. Now it analyzes all that data to improve customer service and pitch new products and services to both bank and supermarket customers. Seems there’s some synergy in supermarket products and pet and car insurance. Since taking control of the bank, Tesco’s pet and car insurance businesses have grown 44 percent and 39 percent, respectively.