In terms of scale, banking as an industry has one of the world’s most impressive collections of data. From personal transaction data to large-scale asset flow, institutions like Citi Bank have some of the fullest financial data sets in existence. Endre Markos is the Director and Asia Pacific Regional Head of Citi Execution to Custody, and is tasked with leading Citi's Electronic Markets development in Asia-Pacific. At the 2016 Big Data Innovation Summit in New York, Endre gave a presentation on the use of big data in a bank as large at Citi.
Firstly, the financial industry is limited by regulatory factors, meaning new products and systems take time to roll out. Andre likens the industry’s obligation to that of a washing machine manufacturer, who will test the product against all eventualities before bringing it to market. The banking industry must do the same, he says, but ‘there are definite regulatory issues that make it very different from the rest of the industry.’ Banking has to take a care that some other industries don’t.
Endre then goes on to discuss how banking can modernize itself fully, exchanging the busy trading halls for a data-led future in which the information needed to make informed decisions is readily available, streamlining the entire process. The data has always been there, big data just allows us to capture it and create comprehensive data sets. ‘The underlying question, the most important question to ask,’ Endre says, ‘is how do we do this by being profitable? And how does it make sense? Because, again, the ability to measure big data is infinite, from a technical capability. But it does use a lot of resources. Where is the commercialization line of being able to deploy that in a way that actually helps the business?’
Endre points to Citi’s incredible data stock. With $14 trillion in assets under custody, it’s difficult to even imagine how much collective intelligence Citi has around financial market movements. Citi holds assets for its clients, moves assets, handles corporations for its customers - this generates an incredible amount of data.
But the financial sector is, according to Endre, behind on data innovation. ‘The financial sector is unique in that, if we do anything wrong, somebody goes to jail. If the eBay system goes down or one of the social networks goes down, there’s an apology letter and a little sign that says ‘Sorry, we’re under construction’… if you can’t take money out of the bank with your ATM, you are going to be mad. So there are a lot of regulations that make sure that we really can’t take chances, and therefore innovation tends to go at a little bit slower pace.’
So how has Citi leveraged its enormous amount of data? Its approach is three-pronged. Endre explains that it aims to provide access to a customised network of 61 proprietary markets for a transformed client experience, digitized and real-time insight tailored to client needs, and unparalleled content consisting of business and market intelligence and thought leadership, produced by local market experts. ‘Ultimately, if you have the data, you should exploit it.’ But this exploitation of data should benefit all clients across all businesses and departments, something Endre notes is often missed but is incredibly important.
Citi has had to grapple with the use - or lack thereof - of external data. Though its keen to mine external data, the company is all too aware of the integrity issues that can come with not being in total control. Confidentiality is also key in the banking industry. Citi’s goal is to provide that market intelligence without harming the confidentiality of individual clients. Providing large-scale asset flows is an example of the projects its clients are excited about, and Citi controls the data to ensure its veracity. So the huge amount of data on offer is not without its difficulties, and Citi’s cautious approach is indicative of the banking industry at large.
Citi’s challenge is to bring their massive data sets to their clients in a way that is digestible and actionable. ‘Technology really helps you get to a point where you can really articulate and have that personal relationship and personal level service. And no matter how big $14 trillion dollars is, it is going to be an asset manager in Brazil, or Shanghai, or London, that is going to be working and is going to be your end client. Big data will be successful when parts of the big data equation are 7 billion people integrated into that big data environment. I think that is, at least from our perspective, a workable and viable commercial model.’
So banking is an industry in which data can revolutionize client service. Endre uses the analogy of a customer boarding a plane to see no pilot. The computer can comfortably guide the plane to its destination, but no one would be comfortable without the human element and the personal safeguard. Similarly, if you board the plane and there is no computer in control, just a person with an Excel spreadsheet trying to figure out the co-ordinates, you’d also get off the plane. Citi sees its analytics tool as the computer. The clients know that whoever is helping them with their assets has state of the art technology behind them, but they also know that the human touch is there to make best use of that technology.