Every time you use a loyalty card, debit or credit card, your transaction becomes part of a massive database known as Big Data. Big Data refers to the information which banks, supermarkets and other organisations generate every day of the week, every time someone swipes their loyalty card or fills their car with petrol.
The Big Data databases are massive, but clever software can be used to help identify trends and make the businesses more competitive.
Supermarkets and other retailers use Big Data to look for purchasing trends and to help them make their business quicker to respond to needs. For example, Big Data helped Sainsbury’s identify which of their many stores were the best places to sell premium champagne and wines. This sort of data also ensures that customers don’t go into store and find things out of stock, and helps the retailer target them with offers designed to appeal.
In the financial sector, Big Data can be used for many of the same processes as in retail. If Big Data reveals that many of the bank’s customers are booking holidays in June, they can then be targeted with related offers for foreign currency exchange or travel insurance shortly after.
This sort of database can also help financial institutions spot unusual patterns of purchasing more quickly and act against potentially fraudulent use. It can also reveal patterns about customers who regularly spend up to their credit limit, or those who only make minimum payments, and this can also help with effective marketing support as well as making the risk management team’s job easier too.
Many consumers are worried about their financial data being used in this manner, but with such a huge quantity of data, identifying any individual is impossible. The finance companies are looking at overall trends and patterns rather than analysing the spending of one person in depth.