With projected year-on-year growth in global data currently standing at around 40 percent Big Data has become a critical part of customer, supplier and operational relationships across every sector in the global economy. The availability of new data sets from multimedia, smartphones and social networking sites, and new ways of linking those datasets, have played a pivotal role in generating new insights into customer needs and behaviors.

A number of online consumer retailers, such as Netflix and Amazon, have successfully harnessed the power of customer data and use ‘recommendation engines’ to make purchase suggestions to customers based on their prior interests verses those of millions of others. Indeed, according to a recently published multimedia eBook by McKinsey, those firms that use Big Data and analytics effectively show productivity rates and profitability that are 5–6 percent higher than those of their peers.

The vast swathes of customer data that banks have at their fingertips puts them in a similarly strong position to gear their product strategies towards specific groups of customers and individual customers themselves. Some credit card companies, for example, have used associations found in the course of mining data to evaluate the risk of default. Generally however banks have been unable to capitalize on their use of customer data and drive real value from targeted product delivery in the same way as online retailers.

The problem lies not in banks lack of technological capability but in regulatory and cultural hurdles that need to be overcome.

Country borders are a big challenge for banks and the local branch infrastructure that exists in most countries is not suited to the increasingly mobile, globalized and digital customers of today. The ability to move assets across borders is very complicated, even inside the EU, while requirements for customers to have local accounts for local business further limits the availability of cross-border banking services and a consolidated view of customer experience and behavior. With these limitations in play it becomes increasingly hard for banks to build accurate data profiles of their customers and easily identify future product sales opportunities.

Those familiar with George Orwell’s dystopian novel Nineteen Eighty-Four will understand the tyranny epitomized by ‘Big Brother’, a quasi-divine leader who justifies oppressive rule in the name of a supposed greater good. Culturally, bank customers also become nervous when they see their bank acting like Big Brother, and alarm quickly spreads if customers start receiving marketing material and product pushes based on their previous spending habits. This reaction is interesting, particularly when the use of cookies and capture of spending habits is generally accepted in the world of online retailing.

Banks will eventually narrow the gap with their online retail counterparts in effectively using customer data to implement future product marketing strategies. They are already using innovative applications to compare customer spending habits or portfolio decisions with comparable populations of customers according to age, salary and average spend on certain types of products.

While banks have all of the necessary data they need to segment their user populations and better target end users the success of Big Data product marketing ultimately lies in forces outside of the banks control. Both the regulatory and cultural environments in which banks operate must loosen. Only then will banks be able to create additional volume by acting on customer data and giving their customers exactly what they want.