Data talks big in Brazil – for now
The country’s biggest banks are working on the big data challenge. If successful, it could transform the industry and its performance. But quantifying the impact and differentiating between potential winners and losers is almost impossible.
It’s impossible for me to include the impact of big data in my valuation model. If I ask the banks, they all say they are using it – that it’s a very important tool – but it’s impossible to know using publicly available data how they are using it and how big the impact is. I have absolutely no idea.”
This blunt assessment of the impact of big data from an equity analyst of Latin American banks is near universal. The banks, they say, are all talking about big data initiatives. They say it is going to drive performance, but any metrics about how the issue is affecting the business today, or even meaningful projections about how big data could improve results in the near future, are not forthcoming.
Perhaps one way try to grasp the impact of big data is look at how the first wave of digitization hit banks and valuation models. But even that is problematic.
“All the banks use different metrics,” sighs one analyst. “What one classifies as an online client could mean they have downloaded an app. Another might classify it as someone who has used online or an app in the past 30 days.”