Bank of America (BofA) says it is not a financial services company. Like Google and Facebook, it considers itself an information business, says Ben Lever, senior research engineer at NICTA, an Australian information and communications technology research centre. Lever says BofA wants to know more about its customers. It analyses their transaction data to detect changes in financial behaviour. This provides opportunities to engage people to improve customer service or sell products. For example, if a customer begins shopping at childcare stores regularly it is an indication they may be preparing to raise a family or bring their next child into the world. BofA can then enquire if the customer would like to increase their level of insurance now that they have one or more dependents.
Or they may want more credit as household costs increase. Here BofA is attempting to “monetise data,” Lever says. This shows how companies can exploit a new development in society called ‘big data’. This catch-phrase describes how the volume, velocity and variety of data are rapidly increasing as people generate information every day in business and personal lives. Increasing use of the internet and new communications devices, particularly smartphones, are the drivers of big data. Through these mediums we are generating more data than ever before. It is being transmitted at faster speeds. And we are being exposed to a greater variety of information than in any period. We are now generating zettabytes.
A zettabyte is a unit of information storage so immense that no system in existence can contain one. In 2010, 1.2 zettabytes of data was generated. This is enough to build a wall of iPads 20 feet high around the South American continent, Lever says. Every 18 months we double the amount of digital content in existence. Web companies are the “pioneers” of big data, Lever says. Their data sources are the browsing histories of internet users. Facebook, for instance, learnt the value of information about people’s friends and social lives. However few other businesses recognise its value of big data. Superannuation funds can learn some lessons from BofA. They can track the contribution histories of members and contact them if money stops flowing in.
Or, they can monitor members’ behaviour during rough markets and ascertain character types. As members approach retirement they can get in touch to offer advice about protective investment strategies. Companies that mine big data are employing ‘data scientists’ who aim to understand how this information can be used to become more competitive. There is no way to learn these skills but to practise them, Lever says. No courses or off-the-shelf products can help businesses synthesise massive volumes of data. Most information businesses develop their own analytical capabilities. It’s an investment. “The expense is really in the people performing the analytics rather than on technology,” Lever says.