Changing trends in Customer and Risk Management
We live and work in societies that have been structured on organisations. Whether family, religion, education, work or government, we look to organisations to create boundaries and norms which assist us to define our identities and to cooperate with one another.
The dramatic changes in technology and the associated information explosion is beginning to change these norms and allow for the suggestion of alternatives. An example is the potential for virtual currencies to undermine the status quo of international economic transactions, national currencies and financial reserves and central banking which defines our current economic reality.
The very clear lines and boundaries of the post-modern society which defined our era are beginning to blur at an alarming rate.
This is felt significantly in the area of credit risk and customer management. Previously solid reliance on financial metrics and reports are being eroded by costs, commoditisation of data, skills and resource attrition and higher demands on output and service.
We are living in the world of Big Data where data is being sourced on a continuous basis from a myriad of sources. Volume, Variety, Veracity and Velocity of data on a single subject will drive decisions that ultimately can be advantageous or damaging to all parties.
These 4 V’s elucidate the importance of data in understanding subjects and their complex relationships based upon behaviour, opinion and motive. For the first time, digital analysis of the psychology of the buyer is possible with associated market segmentation and market response.
The possibilities are endless.
This deals with the sheer amount of data available on a subject. In 2010 the estimated total volume of data currently available in the world was ±900 exabytes (EB) of data.
For the uninformed, 1 exabyte is equal to 1 000 petabytes or 1 million terabytes or 1 billion gigabytes of data. Alarmingly this amount was expected to grow at a rate of 50% per annum.
At 2017 that places the current estimate at over 35 000 EB or 35 zettabytes (ZB). There is still one more definition in the order of magnitude of data. The yottabyte (YB). I guess that our kids will spend time developing new definitions of extremely large numbers and we thought that Zimbabwean inflation was bad!
This is one of the most interesting areas of data development. Previously, data needed to be structured in order for it to be organised and subsequently analysed. New trends take unstructured data (twitter comments for example) and begin to analyse them and form or frame predictive outcomes based upon behaviour and opinions.
Data reliability and truthfulness. In other words what reliance can be placed upon the data to make a decision.
The rate or flow of data. This increase is based upon the rate of change or data contribution from a subject. Using Twitter again as an example, a teenager is twice as likely to contribute opinion and comment than a +50-year-old.
The value of big data is undoubtedly being demonstrated in the world of consumers and natural persons. The business world is not far behind. As more and more virtual practices are adopted businesses leave behind significant virtual or digital footprints which can be analysed and exploited for behavioural, marketing and risk analysis.
Drive your performance into the black!