Competing through the use of big data by retail banks in South Africa.

Abstract

Organisations striving to achieve competitive advantage are no longer an exception, as it has become a basic requirement for their survival. The explosion of machine-generated data through varied sources provides organisations with a unique opportunity to create value, and compete effectively in the market. The current research study provided a guideline for retail banks operating in South Africa to manage, efficiently use and achieve competitive advantage using big data. Since big data is still an emerging technology, not many studies have been conducted on the topic. This research is empirical in nature and therefore a qualitative methodology was selected for the study. The respondents were purposefully selected using social networks, participant references, e-mails, and telephonic calls. The research revealed that banks in South Africa are still in the infant stage of embracing big data in accordance to study conducted by Davenport and Dyché (2013) and there are currently neither hard findings nor case studies to prove the success stories. The fear of falling behind the market and believing in big data’s potential has created an enabling environment for South African banks to invest in big data infrastructure. On the contrary, few South African banks are actively using big data for their various operations, and others are still catching up with the technology. As expected, the study revealed that banks gain competitive advantage through various factors, provided they embrace, implement and execute big data strategies relevant to their business. In addition, the study was not able to conclude whether the competitive advantage gained using big data was sustainable or transient due to mixed responses. The analysis identified innovations, fraud prevention, organisation culture, and customer segmentation as crucial factors for banks to gain competitive advantage. Analysis further presented that big data plays a crucial role in excelling on these identified factors that provide competitive advantage for South African banks. However, the ii analysis of the data also indicated that other aspects such as infrastructure and data ownership are crucial for banks to gain a competitive advantage. Key words: Big data, Competitive Advantage, Customer Segmentation, Fraud Prevention, Infrastructure, Data Ownership