How Big Data Is Transforming Finance
There is so much data that even the savviest global banks don't know quite what to do with all of it
Recently, I was reading about a fascinating new push for graduates with data mining experience in the financial services field. Now here is something the world's big economies should be concentrating on: the science and mining of Big Data. Indeed, the consultancy McKinsey predicts that as soon as 2018 the United States alone could be facing a shortage of up to 190,000 people with data mining experience.
It's not that there aren't plenty of data specialists already. It's just that the amount of data has grown exponentially in the past few years. Think about this: 90% of the data in 2014 was created in the last two years. In 2015, the same amount of data will be created in one year. And in 2020, it will take less than a second! Also, there will be 80 billion sensors in devices and 100 million viral connections per minute by 2020. In fact, there is so much data that even the savviest global banks don't know quite what to do with all of it. What they do know is that hidden in the gigantic haystack are a few priceless needles. They are struggling to find them because if and when they do, their financial services operations will reap the benefits.
In fact, data science is seen more as a strategy than a field of study and/or expertise. That's because big banks are increasingly relying on the right software and those charged with running it to find relevant data among the endless mountains of it and ask pertinent questions, like: How can this data help the enterprise with its mission? Who is in need of a loan? Who might be receptive to applying for a credit card? How can all that data put us at an advantage over the competition?
What we're discovering is that there are a whole new league of young workers who know exactly what 'web scraping' is and how best to leverage it in their respective roles. It's no wonder that LinkedIn, the business networking social media site, ranked data mining as one of the 25 'hottest skills' that helped get people hired last year. I think the rise of data mining is interesting not only for its use in the obvious fields like finance but creative industries where any sort of scientific approach used to be frowned upon.
For example, there's a company called Next Big Sound that uses Big Data to gauge what young people - the ideal music-buying demographic - are wanting in their pop music artists. The company utilizes that data and creates the next batch of music superstars by tailoring their music, appearance, and brand to what its data specialists discover during the analytics process.
The finance and music industries are just a few of many consumer-focused sectors where it pays to know as much about your clientele as possible. And it's not all dollars and cents. There's even a socially focused website called DataKind that is concerned about the common good - it puts data specialists in touch with each other in order to solve pressing social issues. It's reassuring that the next generation of young people are already studying to master the science (and art) of data mining and becoming data specialists.