The hype surrounding Big Data use far exceeds its actualprevalence, according to a new report from Celent.

Among financial services firms with hands-on experience,however, Big Data holds big promise, according to the new report,“How Big is Big Data: Big Data Usage and Attitudes Among NorthAmerican Financial Services Firms.”

“Insurers interviewed generally didn't identify with the 'big'in Big Data, citing that volume was not their challenge,” saysCraig Beattie, senior analyst with Celent's Insurance Group andcoauthor of the report. “But Big Data technologies are enablingthem to address variety and velocity issues.”

This report begins with a review of how North American financialinstitutions understand and value Big Data and data analytics. Thisincludes where insurers expect to see activity and how theinvestment in Big Data will show up. The report explores the levelof experience financial institutions have with Big Data, thetechnologies employed, and results achieved. It then examines howBig Data is impacting organization, culture, and decision-making infinancial industry firms and concludes with a discussion of thebarriers to success: both perceived and real.

Key findings of the report include:

• Firms not yet experimenting with Big Data need to be. There issignificant activity surrounding Big Data among surveyed firms, butthe activity has not yet resulted in live implementations, exceptfor a small minority of larger institutions. Most respondentscharacterized their firm as immature in its understanding and useof Big Data. Most North American financial institutions are stillgetting their arms around the topic and are quick to concedesignificant gaps in their leveraging of “little data” to itsfullest, much less Big Data.
• Big Data remains trendy and ill-defined. In the absence of abroadly embraced definition, attitudes vary about Big Data. Firmswith hands-on experience are more bullish about Big Data and thevalue it can provide.
• A majority of firms (60 percent) maintain that information(including Big Data and analytics) holds the key to competitiveadvantage to a significant extent. A surprising number (nearly 40percent), however, assert a small to moderate influence oncompetitive advantage.
• Despite the explicit importance of data and analyticscompetency, a minority of surveyed insurers (20 percent) havehands-on experience with Big Data in a production environment. Anequivalent percentage has pilot initiatives in place, often morethan one. The bulk of experience lies with projects aimed atimproving sales results or reducing risk/fraud.
• Big Data experience is closely tied to the value placed on dataand its ability to derive competitive advantage. Early-adopters arethose embracing a competitive advantage by doing so. Amongfinancial institutions with longevity of experience (more than oneyear), 70 percent of projects have met or exceeded business caseexpectations. For these institutions, the promise of Big Data isvery real.
• Barriers to success are many, with lack of technical expertiseand analytic talent key among them. Deriving compelling value fromBig Data thus requires deliberate and sustained effort.

Bob Meara, a senior analyst with Celent's Banking Group,co-authored the report.