By now most individuals have heard of ‘Big Data’ in some shape or form at a business level and key decision makers have been busy determining what value they can derive from the organization’s data and how much budget they should allocate to manage this task. Often the question is not – is big data important but: “How should I manage and prioritize that data?”

Big data was originally a conversation that began with IT teams, struggling to manage and store the mass of information as a result of daily business operations in a more online and connected world. Since the initial coining of the phrase, it has now been cemented as a priority among boardroom agendas as executives realize the potential business value that an organization’s data contains.

This is particularly true for financial institutions – a ‘data driven’ sector that arguably stands to gain more from the data explosion than any other industry. According to a recent study commissioned by New Vantage Partners LLC, the conversation is further along with Financial Services Organizations (FSO’s) than most other industries in making use of predictive analytics.

Predictive analytics and the management of big data go hand in hand. Traditionally, and certainly for banks and Financial Services Organizations (FSOs), data storage has been purchased on an initial cost basis (CAPEX) with little regard being paid to the annual costs of items such as support and maintenance, IT staffing, power and the hardware and software needed to accommodate growth.

Now, we are seeing numbers of organizations move beyond the hype, implementing data driven analytics that help to answer real business questions. Earlier this year, Intel made some noise about how its early forays into the space had resulted in as much as AU$10 / USD$8.94 million in value being delivered and the New South Wales government was noted to rapidly adopt analytics as a result of its datacentre consolidation program.

Recognizing the Unstructured Data Opportunity

In order to benefit from big data, organizations first need to better understand their unstructured data and how and where it functions within the organization. Typically, it is found in silos and found across multiple applications and platforms.

Looking to address this issue, ‘Data Defined Storage’ is an emerging category that unites application, information and storage into a single architecture, placing data at the center of the equation. This enables data to define the architecture rather than vice versa. Users, applications and devices can access a repository of captured metadata. Once this data is available and transformed into information, the organization can access actionable business insights, supported by an infrastructure that is both flexible and can scale in parallel with data volumes.

Banks and other FSOs are turning to big data, using insights taken from daily transactions, market feeds, customer service records, location data, and click streams to carve out new business models and services to transform a go to market strategy. Between 60 to 80 percent of all data in the financial services industry is unstructured, which causes major cost and compliance challenges, making it difficult for organizations to gain value from their data.

These challenges can be resolved by implementing an infrastructure based on the afore mentioned Data Defined Storage – empowering organizations to look at their data as an asset verses an ongoing cost center.

Turning Knowledge into Power

By recognizing Data Defined Storage as a new approach to managing, protecting, and realizing value from large amounts of data – users and applications can gain access to a central repository of captured metadata and data. With this knowledge, organizations are empowered to access, query and manipulate the critical components of the data, transforming it into business-ready information that can answer critical business questions, as well as new insights not previously possible. In addition, Data Defined Storage provides a flexible and scalable platform for storage of the underlying data.

Aside from providing answers to important business questions, there are many other benefits for FSOs, particularly when it comes to compliance, information governance automation and unification of data. By improving and automating information governance processes such as the indexing of data, data classifications, tagging and improved corporate compliance, FSOs increase their effectiveness. This is realized through streamlining business processes to improve search capabilities, conducting early case assessments and other enterprise data centric activities. The availability of regulatory compliance reporting allows organizations to stay one-step ahead of regulatory requirements and ensure transparent communication with teams, offices and relevant stakeholders.

As financial data flows into organizations, users can automatically separate the different log data that is generated by the trading platforms as flat text files, and dynamically assess content and type. Then, based on its business value, they can automatically separate and tag data types such as trade log data, relevant market data necessary for best execution retention, relevant market ticker data, and generic ticker data from irrelevant markets. Each of these different data types has different business value and can be deployed for various purposes, ranging from tracking and processing trading activities and satisfying regulatory demands to driving predictive analytics for future trading. The data can be either saved for long-term retention on tape, or destroyed if it is useless, e.g. generic ticker data from irrelevant markets.

FSOs often overlook the ability to monetize unstructured data within the business. This data contains the sum total of all knowledge within the enterprise which holds value to third parties as well as improving processes internally. By implementing Data Defined Storage, FSOs are able to mine the net worth of their data and manage through data-in-place dash boarding and analytics. This creates potential cost savings and increases competitive advantage.

Business Data Value – 2014 and beyond

For the last few years, there has been a lot of talk about ‘Big Data’ and its potential value to the business. Looking at 2014, we will begin to see true success stories emerging as organizations begin to make good on their quiet preparation and investment to uncover the value of their data.

Delivering mission-critical business value is most certainly linked to advanced data strategies that can address the spectrum of challenges and opportunities that are dictated by unstructured data. According to a survey by the University of Oxford and IBM’s Institute of Business Value, a massive 71 percent of Financial Services companies were found to already be using big data and analytics. As a result FSOs have realized that data is critical in delivering a competitive advantage in an industry that continues to rebuild after a worldwide financial crisis.

As businesses of all sizes look to optimize data as a strategic asset, the goal is to make data management invisible to end-users. To use an analogy, most car drivers are not interested in how the engine functions, but rather are only concerned with what happens when pressure is applied to the gas pedal. With a Data Defined Storage solution, the equivalent of the car is an application that provides—for instance—a unified approach for compliance and search while enabling security—and all at the data level, not the device level.

By embracing Data Defined Storage, FSOs and other organizations will be able to benefit from three core business benefits. Firstly, improved operational efficiency for reduced total cost of ownership by up to 80 percent over time; secondly, reduced business risk by addressing data security and information governance challenges; finally, enhanced business agility and decision making for improved revenue growth.

The data-driven world we live and work in today demands a new way of managing and storing data. Following the financial crisis, FSOs must also adhere to a changing regulatory environment that looks to better protect businesses and their customers from data privacy and security threats. Organizations must better utilize available technology to help improve operational business efficiencies and maximize knowledge gained from critical business data.

Smart CEOs, CIOs and the new emerging role of Chief Data Officer are already working on how they redefine the way in which they hold data within the organization. Whether they look to build in-house or work with a trusted partner, they need a technology solution that can be deployed with their existing technology infrastructure and application, grants access for various access levels and provides a dashboard of real-time, data-in-place analytics. With a true visualization of business data, FSOs will be able to offer more tailored services, based on better insights and understanding of the industry and their customers. Designing storage with data at its heart also lowers the total cost of ownership for FSOs. At a time when IT budgets are being squeezed across the board, investing time and budget to a redefined data infrastructure will resolve many challenges and provide a sustainable competitive advantage, all in one simple implementation. So the question on the smart CEO’s lips should not be how, but who – “Who can help me to better manage and gain value from my data.”