Creating Value From Big Data.

Over recent years we’ve seen Data Sciences grow as one of the sexiest professions, it even has its on buzz term, Big Data. But even with the buzz, the majority of organizations that make attempts enter the arena fail to see the true value in big data, creating customer value. Big Data’s potential far exceeds cross-sell, market insights or relationship management.

Like TV and radio, the Web paid for itself through consumer aggregation:  getting millions of eyeballs focused on specific content at a specific brand URL, to absorb the content crafted to enhance brand awareness, market dominance and consumer sales.  Through social media, the eyeballs’ owners’ hands and video cameras now react to brand content and generate independent and regenerative content, conveying different themes than brand owners intended. CRM, The Internet, and even ATMs, organizations focus on metrics that only measure the internal value of these innovations. Take for example Internet Banking. For the large majority of banks the metrics of performance they focus on is the cost to serve, Branch vs ATM vs Internet. Perhaps this mentality has been the reason banks have been the worst adopters of the Internet’s potential. Companies like Facebook, Amazon and Google have something very different in the way they approach innovations, they ask themselves what value it can bring to the customer. Amazon enhances the browsing experience through its Amazon suggests features, Facebook turns network insights into ‘People You Might Know’ or ‘Things You Might Like’. Google learns and optimizes your search experience.

In the article ‘It Ain’t Personal‘by Stephen Powers, Anjali Yakkundi and Ron Rogowski, they outline the stance that organizations have long “personalized” their websites for customer segments. Now they need to go further, first by delivering the right experience to the right user at the right time and on the right device and next by delivering relevant, tailored experiences that meet individual user needs by combining historical, behavioral, and profile data with real-time situational feedback. We call this next step in customer experience targeting contextualization.

Personalization & Analytics are not new to financial services, ever since the mainframe computer took over the banks core, banks have continually tried to extract insights from one of the richest sources of data on the planet, how people use their money. Historically through, the only outputs from these initiatives have been internally focused. Transactional analysis for fraud detection, behavior analysis for cross/up sell, position analysis for credit risk management, Monte Carlo simulation for exposure forecasting, all internal metrics. When was the last time you heard about a bank that analyzes your financial behavior to provide insight on spending habits, or encourages sustainable use of your cash flow? I can tell you, it wasn’t a bank. Simple’s ‘Safe to Spend’, is one of the first data analysis initiatives that only delivers something valuable for the customer. Giving the customer a simple indication on sustainable spending. If we are being honest with ourselves, such an insight would be in contrary to the economics of most transactional products in banks, where they make more money through the nativity of the consumer, over drafts, late fees and impulse spending. The message from banks tends to lean the way of enabling unsustainable cash flows so you have to get into more debt.

Could a bank change its ways? Potentially, but the odds are stacked against them. Current internal metrics and KPIs would show massive shifts against P & L owners. But there have been glimmers of hope. Capital One in the US came to the market with the very intent to be data driven. Plus ventures under Citi Group have also seen some insight lead customer value propositions.

A larger context is emerging for digital consumers who choose to include a product in their lifestyle and life story – Does the brand, company and product authentically represent that consumer’s purposefulness, the goals they aim to achieve for their family, community and the planet?  According to Stanford University’s Bruce Cahan, In this consumer environment, the currency through which consumers pay for the goods and services offered becomes a storytelling medium, tagged by whether it really helped the workers who produced it, of the environment of the region where its coffee or other raw materials were grown and assembled.

Today’s banks don’t offer such digital money.  In order to let consumers have the flexibility of what Bruce calls storytelling money™ or semantic money™, he designed GoodBank™(IO) as a mobile ethical bank, using high-transparency, impacts-aware technology.

The recent 5 years has seen the accelerated growth of data that stands to match and exceed the potential of transactional data, social media. Every minute massive amounts of it are being generated from every phone, website and application across the Internet, data that can be used to create amazing customer value. In his post, HOW MUCH DATA IS CREATED EVERY MINUTE? Josh James of Domo, dissects the worlds data creation. Many innovative organizations have recognised the potential of this data, such as ESPN, which drives ESPN.com through Facebook open graph data to optimize the content a user experiences.

So I challenge this new generation of Data Scientists, lead your profession to take advantage of its true potential, the creation of engaging, contextual and insightful customer value. Don’t create a suite of more internal indices that become tomorrow’s KPIs. The potential of Data is in your hands, use that to define an entirely new generation of experiences.  There will always be a place for internal metrics

© Scott Bales 2014. All Rights Reserved.