Big Data and Finance

Technological advance is changing the world in a speed never before imagined. One of the most significant breakthroughs of today is the use of big data. According to Ginni Rometty, the CEO of IBM, “data is becoming a new natural resource. It promises to be for the 21st century what steam power was for the 18th, electricity for the 19th and hydrocarbons for the 20th.” As the application of big data is gaining attention in a variety of fields, one industry joining the new trend is the finance sector. With many global companies in the vanguard of the fourth industrial revolution, Korean companies are seeking to catch up as well.

As Walter Wriston remarked, “information about money has become almost as important as money itself.” The business and finance industries are to be almost the biggest beneficiaries of the fourth industrial revolution. Many foreign finance companies such as JP Morgan Chase, Citibank, and Mastercard have been evolving with big data, whether it be enhancements in security, marketing, or research. Korean finance companies are following in the footsteps of foreign corporations. To be more specific, Korean credit card companies have been focusing on the marketing side of data science. The Korean government has been lowering credit card fees, which has led many credit card companies to develop big data services in the hopes of strengthening marketing strategies and increasing revenue.

Samsung Card was one of the firsts to offer personalized marketing content with its “LINK” service in 2014. LINK provides personalized discounts to customers by analyzing card transactions and suggesting discounts for retailers they are most likely to visit. It also allows customers to enjoy the benefits by simply adjusting the setting of their cards beforehand instead of having to download separate coupons. This service proved to be a marketing success, as such conveniences led to higher rates of actual purchase compared to the rates of text message or target marketing. Samsung Card ventured further into big data marketing by opening its Big-Data Marketing Partnership service. It uses smart algorithms to analyze information such as customer buying patterns and market trends. Then, it presents efficient marketing strategies and consulting services to franchisees based on this customized analysis. The main goal of this service is to support franchisees with practical benefits to help them gather more customers and generate more revenue.

Shinhan Card is another rising star in implementing big data into its marketing techniques. Shinhan Card launched the product line “Code 9” by analyzing consumption patterns of its twenty-two million customers in 2014. The card series categorizes men and women in nine categories each and provides every group with a customized card that best fits the group’s interests. Because this categorizing system was carefully put together based on big data analysis, Shinhan Card can provide personalized benefits that match customer consumption patterns more precisely. With its sales reaching five million in just two years, this product line is considered one of the company’s most used and most successfully designed product. Shinhan Card also released a card-linked-offer service named Sally, a program similar to Samsung Card’s LINK service that offers personalized discount services on credit cards. Shinhan Card is very enthusiastic in continuing its endeavors in data science–the company has even been running its own big data research center since 2013.

Companies are striving to process, analyze, and utilize information in ways that amplify the benefits of data science. This improvement opens up a new dimension in marketing and services: customer experiences are more personalized and therefore enhanced. The change stands out not only among people but also in society. Big data is changing dynamics in industries and developing new ways for companies to reach out and keep up with the rapidly shifting consumption patterns of their customers. As face-to-face sales occur less and less everyday while online purchases become more ubiquitous every second, big data is becoming the key to revolutionizing shopping and marketing industries with endless and unimaginable potential for the future.

Hee Eun Shin