Banks are very data-intensive organizations. Especially the risk department and the marketing team heavily lean on data in their daily activities. And yet we notice that the use of analytics in the average Luxembourg bank is very limited. In fact, some of them claim to be using analytics while they do little more than simple queries and reporting.
Analytics : a basic ingredient for innovation
Other banks do realize that they have some catching up to do, especially when compared with neighboring countries such as Belgium, Germany and The Netherlands. Not just to be on the same level, of course, but to be prepared for the future. If banks want to survive in the digital future, they will have to come up with some innovative business models and appropriate supporting technology.
Take for instance the loan approval process. Banks who can offer this online, in a near realtime interaction, will be able to attract new customers, who may even be willing to pay more for this ease of use. But not one single Luxembourg bank offers this option, and the lack of powerful analytics running in the background is one of the major causes.
Even small banks have big data
So what is keeping Luxembourg banks from using analytics. When asked, they often answer with the same argument: “we are too small to make efficient use of analytics, which is more appropriate for large organizations.” But even small banks have big data nowadays! The amount of data, and the various data sources that need to be integrated in order to obtain a full and relevant view of the customer, certainly justifies an investment in analytics.
Another often heard argument is the lack of analytics experts, the so-called ‘data scientists’. This is a true concern which not only troubles Luxembourg organizations: a lack of analytical staff hinders up to 30% of the companies in their ambitions to put big data and analytics to good use. That may be a project to be tackled jointly by the Luxembourg private sector and academic world: to set up an academic trajectory that builds skilled data scientists and helps them tackle all big data challenges companies will be facing now and tomorrow.
So Luxembourg, private and public sector alike, is in dire need of a drastic mentality change, in order to embrace analytics as an essential ingredient for the success of tomorrow. If they achieve that, they may well realize that analytics helps them discover the treasures hidden in that huge pile of data they have gathered over the years. And, when discovering that, they may realize that analytics in itself is probably a valuable treasure too.