McKinsey Big Data Overview

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Introduction to Big Data and Big Data AnalyticsMcKinsey Cash Management Forum

April 10, 2023 v. 6a © 2012 OpTier. All rights reserved.


Agenda

• What is big data and how much data?• What's causing this disruption and why now?• Is it hype or real and who are the players in Big Data and

Analytics?• What's wrong with the current Data Intelligence process?• What's the impact for financial services?• Use Cases - Its all about the Analytics!

This is a lot to accomplish in 25 mins and right after lunch!!


Big Data Everywhere!

• Lots of data is been collected and warehoused…

₋ Web data and e-commerce data₋ Transaction Data₋ Mobile and end-user data₋ Purchase data from stores₋ Bank/Credit Card data₋ Social networks₋ Video and preference data₋ Machine and Sensor Data


We’re Drowning in a sea of Data!


How Much Data?

Facebook at 1B Users

IDC says Digital Universe will be 35 Zettabytes by 2020…..For reference 1 Zettabye = 1,000,000,000,000,000,000,000 bytes of data or 1 Billion Terrabytes, with 80% of that

data will be from internal enterprise systems!

Enterprise Data Growth Mobile Payment TX’s


What's causing this disruption and why now?Big Data is the confluence of three trends consisting of Big Transaction Data, Big Interaction Data and Big Data Processing

Big Transaction Data Big Interaction Data

Big DataAnalytics

Social Media

Other Interaction Data• Mobile data• Video data• Sensor data

•Image /Text•Clickstream•Scientific

Transaction Context

End User Experience

IT Performance

Big Data Processing

1 2

3

• APM data• Machine or log data

• Core Systems Transaction• Customer/Channel Data

• Web Analytics• End-User Data


Who are the players in Big Data & Why

Source: Forbes , Dave Feinleib http://www.forbes.com/sites/davefeinleib/2012/06/19/the-big-data-landscape/

WHO WHY (big money!)


Lets separate the Signal from the NoiseMake no mistake… It’s all about REVENUE…..

Sales Then Sales Now

Online Marketing Then

Then, Unhappy Customer

Online Marketing Now

Now, Customer Experience

Context for Interactions and Transactions

User Insights and behavior patterns

Operational Intelligence

Investment Decisioning

Cross channel interactions

Risk and Fraud Preventions

Predictive and Visual Insights

Impact of IT performance

Companies are investing in Big Data and Analytics looking to solve big problems


Issues with Incumbents…. But it’s NOT that easy to do !!… examples often used are companies (Google, Amazon, Apple, etc) that designed capturing context & analytics into their business transactions and applications.. What do the rest of us do whose core revenue and client facing applications have been built over years…?

• Batch Orientated• Slow Response – Days not minutes• Cannot be reconfigured on the fly• Very expensive requiring multiple

tools and resources• Very IT intensive (80% of the cost)• Complex – requiring manual data

mapping, data scrubbing and establishing context

Source: Gartner (March 2012) – Typical analytic process using CRISP-DM, the cross-industry standard process for data mining methodology

Typical BI/BA Effort


The OpTier PerspectiveWe believe the key is establishing business context in as near real-time as possible. Without context lots of time and money is spent inferring context and relationships before you can even attempt to create insights….

Establishing Business Context means you have to capture in real-time:

WHO (the user and customer data) WHAT (what were the user actions and behaviors) WHERE (location and access points) HOW (device type, channel, formats, TRX path) WHEN (timings, frequency, WHY (Unique business data) SERVICE (Performance, topology, experience) OUTCOME (Success/Failure, Abandon, Follow-on)

… across the entire customer interaction, and across the entire end – end business service


OpTier’s Secret SauceAs stated, establishing context is difficult unless you have built this into your applications. Few have, but OpTier has patented something called ACTIVE CONTECT TRACKING…

... capturing and storing ALL customer transactions with detailed business context and service measurements …

Customer & User Data

Actions, Paths &

Behaviors

Device & Location

Service Performance

Unique Business

Data

Outcomes Success or Abandons

OpTier captures context in real-time HORIZONTALLY across the end to end Business Service ……..

... Mapping Business Outcomes, IT Performance and customer behaviors in real-time enabling …

Business Performance Insights

Real-timeOperational Intelligence

Immediate

Actual

Low Cost

Dynamic

Non IT centric


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Use Cases for Financial Services Business stakeholders?

Customer behavior and patterns by channels especially mobile with a focus on application/user optimization and campaign insights

Real-time marketing campaign impacts on actual business activity and business results

Incremental fraud prevention techniques by isolating transaction and user patterns (looking at social data)

End customer servicing transparency capturing business activity and quantifying results

Understanding cross-channel relationships to enable cross-sell or activity impacts – lots of cost optimization for call-center ?

Impact of IT performance issues on customer behavior, retention and business performance

Spend allocation based on actual cost per transactions of underlying asset usage

Understanding high value churn (or segmenting

Heavy focus from business and marketing users


13

Use Cases for Financial Services IT/Operations stakeholders?

Common IT questions that BDA can answer

Are meeting our operational targets in delivering always-on to the business and end-users?

What actions can reduce the most cost based on actual usage?

My business service is made up of multiple apps, I need alerts across the entire process?

What are my costs per transaction relative to the underlying infrastructure pieces?

How are my top client facing applications performing and are we delivering exceptional experience?

Am I investing in the applications and services that deliver the most revenue and impact?


Summary• There is lots of data and it is growing rapidly. It’s not all high quality and the main insights appear

to be in within the enterprise (versus social etc.). Big Data may not be all about size!

• There is a lot of hype and a lot of vendors in the Big Data and analytics space. Beware the hype! I suggest you make real transaction data the cornerstone. It’s the real source of the truth

• The driving force is to find insights to drive new revenue, new clients and extract more from your current processes, clients and investments

• The incumbents have a problem. It is IT centric, expensive and all the time is spent attempt to establish context before they even start asking questions and seeking insights

• OpTier’s perspective is that capturing context and looking at the actual business and user transactions, the supporting IT performance and the eventual business outcome is the key to valuable insights

• Financial services is a key industry segment and expect a rapid growth is specific use cases. There will be some specific FS big data companies that will provide turnkey solutions

Documents

McKinsey Big Data Overview