Commbank taps Hadoop for custom loans

 

Commissions data mining technology from NICTA.

View larger image View larger image View larger image

See all pictures here »

The Commonwealth Bank is building a data mining platform that will allow it to offer personalised loans and credit card accounts based on individual customers’ habits.

The platform was developed by research organisation NICTA based on the Hadoop framework, which is used by the likes of Facebook, eBay and Yahoo for handling large amounts of data.

It was installed in the bank last month, following a six-week pilot in October 2011.

Commonwealth Bank chief information officer Michael Harte did not disclose when the Hadoop platform would influence the bank’s commercial products, nor how the products would be impacted.

“We’ve got data scientists throwing new questions at it every day,” Harte said.

Facebook uses Hadoop to process and store some 30 petabytes of data and provide website owners with real-time analytics about how users of the social network interact with content (pdf).

Meanwhile, US retailer Target made headlines this month for running predictive analytics on its big data sets to identify and advertise to shoppers who were most likely to be pregnant.

According to NICTA researcher Rami Mukhtar, similar technology could shape Australian retail banking products like internet banking within the next 18 months.

Mukhtar declined to name NICTA’s industry partners but noted that the big data crunching platform was “finding most traction in the retail banking area”.

“There are banks here in Australia that are currently testing this technology,” he said. “I believe that they will be looking at production pilots in the next 12 to 18 months.

“Internet banking for example, will be better tailored for how you interact with the bank. It won’t be apparently visible, but the bank-end technology will give you a better experience as a customer.”

Further down the track, Mukhtar said Hadoop would allow banks to make decisions based on very granular customer profiles – such as how smaller lenders manually assessed mortgage applications.

He explained that large banks typically determined the maximum amount to lend a customer based on “coarse-grained” demographics that split the population into a hundred market segments.

NICTA’s analytics platform will study individuals’ spending behaviour, family situations and cashflow in more detail.

“What that enables a retail bank to do is to say that for this particular customer, I can now tailor a product which will meet their needs and won’t increase risk for the bank,” Mukhtar said.

"Traditionally, if you had a personal relationship with each of your customers, you could have done this. But when you’re looking at bigger organisations, they’re not able to have that sort of personal touch."

Mukhtar and Harte separately warned that digital players like Google, PayPal and Facebook would become formidable competitors in Australia’s financial services sector unless banking IT improved.

Harte told banking IT representatives at the iTnews Executive Summit in Sydney last week that Google and Facebook were already the “online gateway of choice” for many Australians.

Those organisations were seeking to “conquer new territory by owning more of the customer relationship ... [including] the financial relationship, which has traditionally been ours,” he said.

Despite growing public awareness of online privacy risks, Harte noted that individuals were offering up more of their social, personal and financial data “in exchange for value”.

“Personal data is the new oil of the internet and the new currency of the digital world,” he said, quoting a speech made by European Consumer Commissioner Meglena Kuneva in 2009.

“There’s clearly a real opportunity here for us all, if we will be bold.”

Copyright © iTnews.com.au . All rights reserved.


 
 
 
Top Stories
Frugality as a service: the Amazon story
Behind the scenes, Amazon Web Services is one lean machine.
 
Negotiating with the cloud email megavendors
[Blog post] Lessons from Woolworths’ mammoth migration.
 
Qld govt to move up to 149k staff onto Office 365
Australia's largest deployment, outside of the universities.
 
 
NICTA researcher Rami Mukhtar.
Sign up to receive iTnews email bulletins
   FOLLOW US...

Latest VideosSee all videos »

The great data centre opportunity on Australia's doorstep
The great data centre opportunity on Australia's doorstep
Scott Noteboom, CEO of LitBit speaking at The Australian Data Centre Strategy Summit 2014 in the Gold Coast, Queensland, Australia. http://bit.ly/1qpxVfV Scott Noteboom is a data centre engineer who led builds for Apple and Yahoo in the earliest days of the cloud, and who now eyes Asia as the next big opportunity. Read more: http://www.itnews.com.au/News/372482,how-do-we-serve-three-billion-new-internet-users.aspx#ixzz2yNLmMG5C
Interview: Karl Maftoum, CIO, ACMA
Interview: Karl Maftoum, CIO, ACMA
To COTS or not to COTS? iTnews asks Karl Maftoum, CIO of the ACMA, at the CIO Strategy Summit.
Susan Sly: What is the Role of the CIO?
Susan Sly: What is the Role of the CIO?
AEMO chief information officer Susan Sly calls for more collaboration among Australia's technology leaders at the CIO Strategy Summit.
Meet the 2014 Finance CIO of the Year
Meet the 2014 Finance CIO of the Year
Credit Union Australia's David Gee awarded Finance CIO of the Year at the iTnews Benchmark Awards.
Meet the 2014 Retail CIO of the Year
Meet the 2014 Retail CIO of the Year
Damon Rees named Retail CIO of the Year at the iTnews Benchmark Awards for his work at Woolworths.
Robyn Elliott named the 2014 Utilities CIO of the Year
Robyn Elliott named the 2014 Utilities CIO of the Year
Acting Foxtel CIO David Marks accepts an iTnews Benchmark Award on behalf of Robyn Elliott.
Meet the 2014 Industrial CIO of the Year
Meet the 2014 Industrial CIO of the Year
Sanjay Mehta named Industrial CIO of the Year at the iTnews Benchmark Awards for his work at ConocoPhillips.
Meet the 2014 Healthcare CIO of the Year
Meet the 2014 Healthcare CIO of the Year
Greg Wells named Healthcare CIO of the Year at the iTnews Benchmark Awards for his work at NSW Health.
Meet the 2014 Education CIO of the Year
Meet the 2014 Education CIO of the Year
William Confalonieri named Healthcare CIO of the Year at the iTnews Benchmark Awards for his work at Deakin University.
Meet the 2014 Government CIO of the Year
Meet the 2014 Government CIO of the Year
David Johnson named Government CIO of the Year at the iTnews Benchmark Awards for his work at the Queensland Police Service.
Q and A: Coalition Broadband Policy
Q and A: Coalition Broadband Policy
Malcolm Turnbull and Tony Abbott discuss the Coalition's broadband policy with the press.
AFP scalps hacker 'leader' inside Australia's IT ranks.
AFP scalps hacker 'leader' inside Australia's IT ranks.
The Australian Federal Police have arrested a Sydney-based IT security professional for hacking a government website.
NBN Petition Delivered To Turnbull's Office
NBN Petition Delivered To Turnbull's Office
UTS CIO: IT teams of the future
UTS CIO: IT teams of the future
UTS CIO Chrissy Burns talks data.
New UTS Building: the IT within
New UTS Building: the IT within
The IT behind tomorrow's universities.
iTnews' NBN Panel
iTnews' NBN Panel
Is your enterprise NBN-ready?
Introducing iTnews Labs
Introducing iTnews Labs
See a timelapse of the iTnews labs being unboxed, set up and switched on! iTnews will produce independent testing of the latest enterprise software to hit the market after installing a purpose-built test lab in Sydney. Watch the installation of two DL380p servers, two HP StoreVirtual 4330 storage arrays and two HP ProCurve 2920 switches.
The True Cost of BYOD
The True Cost of BYOD
iTnews' Brett Winterford gives attendees of the first 'Touch Tomorrow' event in Brisbane a brief look at his research into enterprise mobility. What are the use cases and how can they be quantified? What price should you expect to pay for securing mobile access to corporate applications? What's coming around the corner?
Ghost clouds
Ghost clouds
ACMA chair Chris Chapman says there is uncertainty over whether certain classes of cloud service providers are caught by regulations.
Was the Snowden leak inevitable?
Was the Snowden leak inevitable?
Privacy experts David Vaile (UNSW Cyberspace Law and Policy Centre) and Craig Scroggie (CEO, NextDC) claim they were not surprised by the Snowden leaks about the NSA's PRISM program.
Latest Comments
Polls
Which bank is most likely to suffer an RBS-style meltdown?





   |   View results
ANZ
  21%
 
Bankwest
  9%
 
CommBank
  11%
 
National Australia Bank
  17%
 
Suncorp
  24%
 
Westpac
  19%
TOTAL VOTES: 1449

Vote