What caught my attention the
other day was how large corporations and key govt organizations in the region were not truly unlocking value from their data. If large corporate giants in this region were to
unlock their data with powerful predictive analytics, they would probably have insight into
the pulse of a nation, better than possibly anything that the nation’s
leadership has ever been used to. Aha! You obviously do not trust me, because that makes no
sense (I see that smirk on your face, but I request your patience). Here is one
example which I have been chewing on for a while...
Believe it or not :NBAD can predict the financial Health of UAE better than
the Central Bank!
Emirates NBD and National Bank of
Abu Dhabi are the largest issuer of cards in the UAE. They have such large market shares in the UAE, that their transaction data captured in the core banking system is probably the best way to track the macro economic indicators of this country than any govt department. Imagine if we were to
track the buying pattern of consumers and the usage of cards, and map it against the GDP of the country over time, with some additional variables
dropped into the analysis. Predictive analytics could help and
identify correlations between consumer spending and GDP and even predict the
GDP into the future. After all, GDP or Gross Domestic Product is the nothing
but the market value of all officially recognized final goods and services sold
within a country in a year.
The advantage of the consumer
cards spending data coming from the banking heavy weights in the country is a
good enough sample size to be able to predict with relative accuracy the GDP
Trend. Consumer spending data (as transactions) is available with the banks all
the time. Mining this data for the purpose over time mapped to GDP is not
rocket science, but the potential of the insight could be startling. For
Starters 1) if Central bank of UAE were to get access to this data, they could
track even on a daily basis the consumer spending sentiment and forecast into
the future 2) Both these banks have investment arms, imagine the investment
bets these banks could make in the stock market on stocks whose prices have a
positive correlation with the GDP.
UAE’s Fiscal policy think tanks
may want to sit up and take note that “if you torture the data long enough, it
will confess”
My USD 0.02 to end this note : Banks and governments have this rare opportunity to reinvent themselves with data analytics. Ignore the jargons IT companies throw at you like Hadoop, big data and cloud and focus on the goldmine of data you already have access to and mine them with a few smart analysts and some power tools like SAS.
Have a good weekend,
