ABA Banking Journal - November/December 2015 - (Page 32)
> INNOVATION AND BANK TECHNOLOGY
AND PREDICTIVE ANALYTICS:
A Big Deal,
Despite sluggish adoption of the
technology, it is increasingly necessary
to ward off competitors, get ahead of
regulators and engage customers.
BY CHARLES KEENAN
A slow start
No doubt, banks have trailed other industries in use of
analytics. Retail is well ahead of banking (think Amazon).
So is search (Google) and insurance (Geico).
Despite the gap-and maybe in part because
of it-the future is bright for banks.
"We are still in the relatively early stages," says William Losch
III, EVP and CFO at the $26 billion First Tennessee Bank,
based in Memphis, Tenn. "We have got a ton of opportunities
to do a lot more with analytics than what we do today."
hen it comes to predictive analytics and big
data, it's well-documented that some banks
have been relatively slow, compared with
other industries, to invest in the technology.
But now might be the time to ramp up.
For one, the banks regarded as leaders in analytics
are deepening their capabilities in order to better serve
customers. With lending, there's also the threat of
nonbank competitors using analytics to make loans
in minutes. Analytics are also playing a role in the
regulatory environment around fair lending violations.
ABA BANKING JOURNAL | NOVEMBER/DECEMBER 2015
Just in terms of spending, it's clear the interest of banks
in analytics keeps rising. Financial institution spending
on marketing analytics and customer data is expected to
total $2.8 billion in 2015, up from $2.6 billion in 2014,
according to the Aite Group, a consulting firm. That
number is expected to rise to $3.2 billion in 2017.
Use of analytics will certainly increase simply due to
banks' retail goals. About 78 percent of bankers listed
"improving sales results" as a top-one or top-two retailbanking priority, according to a Celent survey published
Table of Contents for the Digital Edition of ABA Banking Journal - November/December 2015
A Conversation With the Comptroller
Cover Story Doing the Right Thing
Big Data and Predictive Analytics: A Big Deal, Indeed
Stress Testing: Feeling the Pressure?
ABA Compliance Center Inbox
Cybersecurity Self-Assessment Tool Helps Combat Risk
Real Estate Lending
Banker Recommended Reading
From the States
Corporate Social Responsibility
Index of Advertisers
ABA Banking Journal - November/December 2015