Big data name of the game, says Brazil bank

Financial institutions making the best use of analytics to process the mountains of customer and transaction data they receive will perform well in the market, according to an official from Brazilian federal bank Banco do Brasil.

The ability to sift through, analyze and use information efficiently is of paramount importance, said Geraldo da Silva, VP of technology at the financial institution.

"The big name of the game is big data in my opinion," said da Silva.

"The main challenge for banks, today, is not only to capture but also to process and use the information collected. Whoever better dominates this will come out ahead of the others."

With respect to Banco do Brasil's own big data activity, the executive said the bank had been hiring data scientists and was working to create algorithms to better understand client behavior and even anticipate their needs.

Cloud, mobility and social, apart from big data, are the other technologies in which banks are investing. But more specifically – and particularly concerning Brazilian banks – da Silva underlined biometric security and other fraud and theft prevention measures.

"I think the sector, overall, is doing well in terms of hardware, with large investments in datacenters which has prepared us for the next couple of decades. The main thing now is looking at systems and software."

Banco do Brasil is building a large credit platform to integrate all units within the bank, said da Silva, during the CIAB 2014 IT banking conference being held this week in São Paulo.

In terms of cloud, he sees core banking workloads in the "foreseeable" future to continue being handled by banks' legacy systems.

At Banco do Brasil, some non-core and less critical processes are now being run in a private cloud, focusing mostly on cost reduction, and the bank is looking into using a public cloud for staff training.

Meanwhile, increased competition is coming from different players and particularly in relation to payment methods, he said.

"We see PayPal, telcos going with m-payment ... But banks are trying to catch up. Bradesco and Banco do Brasil launched their own payment system, for example," said da Silva, referring to their jointly developed Stelo digital wallet venture.

In his opinion, there should be an overall shift in IT governance, not only in the banking segment but also in the corporate world in general.

" IT today should not be aligned with the business strategy – IT is the business strategy," da Silva said.

Currently, 94% of Banco do Brasil client interactions are made via non-physical channels, including the web and mobile, he said.

Banco do Brasil is also expecting the central bank to approve a regulation that would lessen the obligation of banks to store hard copies of client records, which would facilitate further automation.