What is the big deal with big data? The overwhelming amount of data now available, and the progressively complicated technology that comes with it, have not only transformed our lives, but also the way industries function and compete. That can mean massive changes for the way advisors interact with their clients.
With over 2.5 quintillion bytes of data created daily, the time has come to figure out how best to collect, process, and analyze this data to better serve clients.
Enabling business growth
Big data is changing the face of technology and with over 2.5 quintillion bytes of data created daily, it should change the way you do business. The creation and storage of big data allows you to:
- Sort through records to identify records that need more attention
- Use AI to monitor economic trends that may affect the stock market
- Accurately calculate risk
- Increase revenue
The ability to properly store, sort, and gather a wide array of information about clients allows you to become not only more cost-efficient but also more effective at advising your clients.
Integration
Big data is enabling integration between trade, portfolio management, and countless advisor applications, which is proving to be a massive, unprecedented benefit. Legacy systems cannot support the vast amount of data and make qualified reports to drive decision-making. It is sometimes best to purchase a new CRM that focuses on the needs that best fit the goal of the firm. According to The Balance Small Business some of the best systems that are capable of handling large amounts of information on a customizable level are:
Health
Detailed analytics can affect how you approach a client’s portfolio. For instance, knowing one’s health – tracked via cell phones, for instance — can indicate a shorter or longer life expectancy. Extremely healthy seniors may be planning for 40 years, instead of the 20 or 30, they might have originally expected.
Those are two very different time frames. Having clients share their routines can give financial advisors an opportunity to provide more specific, actionable financial advice. A retirement account may need to be added to, for example, through alternative means like a life settlement.
Risk management
At the top of any advisor's wish list when using big data, is risk and regulatory data management. With the tracking of customer’s activities among top corporate priorities, firms must be careful to respect privacy laws and maintain careful cybersecurity practices.
Financial advisors must figure out how they will use the information - and that requires people who can walk you through the various options. Partnering with IT professionals will give you a much greater chance of success when it comes to getting actionable insight from your data.
As the big data conversation continues to grow, expect more, and more efficient ways to integrate data in strategies that further your mission as a financial advisor. After all, advisors who fully embrace big data will be miles ahead of their competitors. For more information about advisor trends, read our TED talks for financial advisors blog or contact us today.