Big Trade - Big Data

At SIBOS this week people were shouting about “Big Data, Big Data" https://www.finextra.com/blogs/fullblog.aspx?blogid=8175 It made me think what about trade? – What about Big Data in Trade? - but how do you use it when you get it? 

Bankers in trade mostly get it right, trade has done really well at tracking and checking everything their clients do. In fact, trade has been doing that for decades, long before there was KYC and other compliance tools and rules of today. Trade has always checked a client’s validity, intentions and business motivations, understanding their customers business has given the banks information that is the bread and butter of the Big Data movement.

What I mean is big data exists in trade, the challenge is finding the hidden value that turns each piece into a gold nugget. Banks, typically under utilizing this wealth, which is not cash but data.

The Data Vault is more valuable than the Cash Vault

The bank has to understand their customer and what's important to them. The bank knows who is buying or selling domestically and internationally based on the transactions pumped through Trade, FX and Payments. From these transactions the bank knows which country, state, currency, frequency, amounts, parties, timings, products, commodities, partners, ID number (Bill of Laden #, PO, Invoice, ASN, etc.), contacts, 3PL providers, etc. In short, the bank has access to what a client buys and sells, when, from whom, the shipping, really everything!

In order to help their clients, banks can proactively provide Customer Care using big data, except that, this information doesn't get used. Banks must innovate to leverage big data and create "Client Activity Views". 

If you could imagine, a bank with a clear Client Activity View can tailor a client 'package' - with country information, shipping suggestions, insurance, cross-selling opportunities, inter-bank client partnership building, etc. Offer a trade officer consultation, a group for clients shipping to China or a special one time cross-sell like a commission free FX trade. The possibilities are huge and filled with things that banks can do to strengthen and extend their client relationships.

Keys to Success

Execution requires management insight and discipline by using a 1 part technology to 9 parts great vision formula.

Innovation focused on the right short term wins with long-term strategic goals.

The true promise of Big Data is to improve your clients experience by making your bank better overall, not just by making small parts more efficient.