How to squeeze more value out of big data investments

By TIMOTHY OKAFOR

NAIROBI, KENYA: How much do you really know about what is happening in the minds of your customers and clients? How many decisions do you make based on what people are saying on social networking sites, blogs and discussion forums?

Many organisations in Kenya are realising that the traditional methods of data gathering, storage, analysis and reporting need to be redefined — especially for customers who increasingly express their preferences and transact with companies through interactive channels.

Leveraging big data on these interactions is a way to gain deeper, meaningful insights about customers and clients.

Big data is a technology industry term that describes data collection in large quantities, complex and difficult to process with regular tools and applications.

Big data is rapidly expanding, and is mostly generated by Web 2.0 applications (social networks, video-sharing sites, blogs, discussion forums, etc), and machine-generated data from various devices connected to the Internet, such as servers, sensors, mobile devices and cameras.

REAL-TIME DECISIONS

Big data is particularly relevant for Kenya’s financial services sector. Banks are making real-time decisions based on data provided by mobile and Internet technologies, which are facilitating tremendous customer base growth.

Insurance companies are keen to replicate this same growth using mobile transaction platforms.

They are not alone. According to PwC’s Africa CEO Survey, 98 per cent of business leaders in Africa’s financial services sector are looking for new ways to increase customer demand and loyalty.

Half of them see shifts in consumer preferences and behaviours as a serious business threat; 77 per cent say that users of social media influence their business strategy.

Big data can be used to leverage information about demand, preferences, transactions, social media and more to inform decision making.

It is time for financial services organisations in Kenya to start using the vast volumes of consumer information in their data centres and in cyberspace.

Profiling and targeting new customers based on spending, investing and online habits, while targeting existing customers to cross-sell, will provide a competitive edge.

Organisations may struggle to set up their data warehouse/business intelligence systems to improve the quality of management decisions. Even if they get it right, they may only have a partial view of their systems’ possibilities, unless they can mine data for deep insight on customers.

That insight is derived from buying preferences and social media behaviour, and information from location-tagging technology. Knowing who your customers are, what they want, and how and where they want it leads to better and faster decision making.

Organisations want information that reveals how individuals are using products and services they buy to deliver more personal, higher quality experiences. Never underestimate what a surprise gift or spa voucher may achieve with your top customer or target!

Knowing what internal and external data to collect, how to analyse and interpret it, and feeding this insight into your management or board meetings might be the edge you need to design your next successful product or ground-breaking sales strategy. 

POSSIBLE RISKS

Even as organisations explore the possibilities of using big data, they must focus on possible risks, such as privacy. Organisations leveraging the power of big data must understand the legal implications and requirements of information gathering and seek permissions from governments and individuals.

 Information security is also a concern; organisations must properly define who has access to data.

Ownership and control of data, cyber security, data integrity, large volumes of data, hardware reliability, speed of assessing data and regulatory compliance are other common issues to keep on the radar.

Experts in data mining and associated skills can help firms explore this new frontier.

Kenya’s financial services sector is setting the pace in East Africa and beyond by leveraging technology to provide avenues for business growth and deeper customer engagement. Big data allows organisations of all kinds to see ahead and differentiate themselves in the marketplace.

The writer is a manager with PwC Kenya’s Risk Assurance Services practice and an IT risk assurance specialist.

bizbeat@standardmedia.co.ke