Large banks like JPMorgan have always had big data, but in a letter to shareholders released Wednesday, JPMorgan CEO Jamie Dimon likened the difference between yesterday’s and today’s big data to the difference between a rotary phone and a cellphone.

“To best utilize our data assets and spur innovation, we have built our own extraordinary in-house big data capabilities – we think as good as any in Silicon Valley – populated with more than 200 analysts and data scientists, which we call Intelligent Solutions,” Dimon wrote.

Dimon outlined at least five ways the firm has incorporated big data into improving business processes. In the corporate and investment bank, big data is being deployed to improve operational efficiency by analyzing errors. In custody for example, the firm uses big data to identify and find the root cause of breaks in processes or variances in the net asset values of funds. The result has reduced the operational burden and improved client service, Dimon wrote.

In consumer banking big data has been deployed across several processes, including improving underwriting, delivering more targeted marketing and analyzing customer attrition.

In commercial banking, big data has been deployed for “responsible prospecting,” in other words allocating bankers’ time more efficiently to prospect potential clients with the highest likelihood of conversion into clients. Using big data, Dimon says the bank has uncovered and qualified twice as many high-quality prospects and become more effective in matching its best bankers to the highest potential prospects. “This has given us more confidence in knowing that if we hire more bankers, they can be profitably deployed,” he wrote.

There are also several ways that JPMorgan is using big data firmwide. The firm has begun analyzing the enormous amount of machine data created by its technological infrastructure to gather insight on how it can improve the efficiency of its systems. “This information helps support the stability of our systems – enabling us to identify little problems before they become big problems,” Dimon wrote.

Finally, big data is being deployed for fraud detection both in terms of potential cyber fraud and potential employee fraud. The company, which suffered a massive data breach two years ago, has turned to big data to reduce cyber risks. It has also used data to monitor systems and flag employee anomalies that could be indicative of inappropriate behavior.

Big data was only a component of the firm’s technology spend. Overall, JPMorgan spent $9 billion on technology last year, with 30 percent of that total devoted to new investments for the future, Dimon wrote.

– By Renee Caruthers, FierceFinanceIT Newsletter

References:
http://www.cnbc.com/2016/04/07/jamie-dimons-message-to-bernie-sanders-commentary.html