HSBC is recruiting 1,000 digital experts as it seeks to expand its use of big data. This significant investment shows that companies in the financial services are recognising the possibility for big data to transform the industry.
The UK-based bank’s recruitment drive comes will surprise some analysts because it cut 50,000 jobs only three years ago. It suggests that the bank sees digital technology, and big data in particular, as core to its new strategy. Josh Bottomley, the bank’s global head of digital, retail banking and wealth management, said the new “digital team of bankers” will use big data to improve different parts of the bank’s operations. “They would need to know how to create new products and services while at the same time know how to control risks to protect the privacy and security of customers,” he told the South China Morning Post. His technology background gives Bottomley a data-driven perspective. Before joining HSBC, he spent a year as head of display at Google.
Banks like HSBC have an enormous amount of data on customers and other third parties which they can use to help their business. Tracking the customer journey enables banks to strengthen retention and loyalty programs with individualized marketing and launch innovative products and services. Machine learning facilitates credit scoring, usage-based insurance, compliance risk management and fraud detection. Predictive analytics informs buy-sell decisions and anticipate trends or events that could have an impact in the future. Hiring 1,000 data scientists will allow HSBC to explore these avenues and discover untapped opportunities to drive growth.
HSBC is already using big data technology to manage the risk of financial crime. In April, it announced plans to combat money laundering by analysing data to spot potentially suspicious activity. Artificial intelligence and advanced analytics helps the bank rapidly process high volumes of internal, publicly available and customer transaction data. “HSBC is continuously looking for ways to build on our existing capabilities to detect and prevent financial crime,” said Ray O’Brien, HSBC’s global risk COO and head of global risk analytics. Big data can support companies’ customer, vendor and third-party screening by accessing streams of sanctions and PEPs data, offering superior risk visibility, with greater confidence than manual processes.
Experts predict many companies in financial services will make similar investments in big data in the coming years. A recent study from SNS Telecom & IT predicts financial firms will invest $9 billion in big data this year, rising to $14 billion per year by 2021. While Statista estimates that 81% of UK retail banking firms will adopt big data by 2020, which is higher than their prediction for any other industry. Big data provides business opportunities for banks, insurers, credit card and payment processing specialists, asset and wealth management firms and lenders. Companies that ignore the developments made possible by big data are at risk of being left behind by the competition.
Companies across many industries know that big data can transform their business, if they tap into relevant data sources. Data as a Service allows organisations to find gems of insight from the most relevant data by integrating valuable data sources with existing, in-house data. This allows firms to: