Banks Pull Together To Invest In Big Data

Since the financial crisis, US companies have been working together to create new organizations that will save them money and better protect their interests. The financial sector, which was hit hardest during the recession, has made its way back in to the black in recent years and banks are planing to stay that way by partnering with each other through information sharing pacts designed to streamline their businesses and cut down on costs.

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dubbed Securities Product Reference Data (SPReD). The new entity is expected to pull together reference data on financial instruments in order to help the banks set pricing and transaction costs. That kind of data analyzation used to be done in-house, but the new organization will give the banks access to a wider range of information at a lower cost.

The Society for Worldwide Interbank Financial Telecommunication has also

for financial institutions, which it says has already signed on 1,125 interested banks and brokerages. The service, called the Know Your Customer Registry, gives banks the opportunity to gain information about customers who have already been screened by other banks. By sharing that information, banks can avoid the pitfalls of the Know Your Customer screening process, which often holds banks accountable if their efforts to qualify clients are considered sub-par.

While big data agreements like these ones seem to be becoming the norm, there are still several concerns regarding their reliability. For one, many industry participants worry about sharing too much information with their competitors. As the agreements have several rival banks working together, some worry about protecting their own interests. Another consideration has been cybersecurity. With the number of hacking attacks against large companies on the rise, some banks worry that by putting several companies data together in one place, they are tempting hackers. Adequate data protection is an essential part of making data sharing attractive.