ETFs will build an army of 1,700 data analysts

First National Bank (FNB) is looking to hire up to 200 data analysts, as the Big Four banks actively seek to tap into its rich data assets.

This was revealed by Christoph Nieuwoudt, director of analysis at FNB, in an interview with ITWeb this week.

With data becoming an extremely valuable resource, Nieuwoudt says FNB already has a staff of 1,500 people in its data analytics division, but struggles to find the skills needed to fill the 200 vacancies.

Data analysis is the study of data to interpret and further process it to convert it into meaningful information for making intelligent decisions.

The growing interest in the use of data analytics in banking is due to changes in technology, people’s expectations, market structure and behavior, which have prompted banks to place analytics at the heart of their activity.

Nieuwoudt says FNB primarily deploys data analytics for fraud detection, risk modeling and credit risk analysis.

The bank is also using technology to energize its behavioral banking initiatives, something new digital banks are proving hugely successful with.

“We have 1,500 data analysts in our group, which is not a small number. We believe we are the largest data analytics group in Africa, and we see other organizations growing as well. We see this either because they hire people from us or because we compete with them for data analytics staff.

Looking for the right skills

“We have a very rich data heritage, as a retail bank. We have around 10 million customers who earn over R1 trillion a year in salaries, and they spend hundreds of billions in outlets and elsewhere. It gives us very rich data to work with,” he notes.

As the bank realizes the power of data analytics, it recently appointed Nieuwoudt to harness the vast amounts of data it generates.

“It’s a relatively new role – I’ve been in this position for a year and a half; it did not exist before my appointment. I think it’s a sign of the maturity of data analytics as a discipline,” he told ITWeb.

“If you think of the Third Industrial Revolution, which was largely driven by the use of computer technology, companies employed data managers. Today, with the Fourth Industrial Revolution and the rise of learning automation and artificial intelligence, the focus was on analysis, hence the role of director of analysis.

Christoph Nieuwoudt, director of analyzes of the FNB.

Christoph Nieuwoudt, director of analyzes of the FNB.

He says it has become a management position, where traditionally it was in IT or finance.

While data analyst skills are in high demand, Nieuwoudt laments the skills shortage in South Africa.

“We have a high unemployment rate in South Africa, which is unfortunate. But there is a shortage of computer skills, as well as data analysis skills.

South Africa also faces the challenge of emigration of skills, including data analysts, as it points out that the country has been quite strong in producing IT skills. “If you look at the people who migrate, you’ll see that it’s a lot of IT people, as well as data analysts. We are still transferring skills in these areas to other countries.

“We wouldn’t have a strong financial services sector if we didn’t have a strong skill set. But I think as an industry we don’t focus enough on developing those skills.

Nevertheless, he says there is hope. “If you look at the orientation of universities, a number of new degrees have been launched in areas such as data engineering at the undergraduate level in a number of universities.”

To maintain its data analysis skills, the FNB has implemented several initiatives, Nieuwoudt explains.

“You have to take care of the data analysis staff. For example, we have created a data analytics roundtable forum that specifically examines the needs of this community. We also have data analysts, other than myself, at other segment and function levels. We have a dozen data analysis officers.

“We’re starting to professionalize that in the same way that people would view chartered accountants or actuaries etc., which I think is very valuable from a retention standpoint.”

Nieuwoudt observes that data analytics is a growing field globally. “I guess the competition is not just between financial services companies, but between different industries. Think of Apple, Google, Amazon, Facebook and the like – they’ve built really big global companies using basically data and the analyzes very intelligently.

The fields of IT and data analytics are linked in many ways, he says, explaining that while IT is involved in the overall implementation of technology to support business processes – for example, to run backend applications and systems, etc. – data analysis staff are more specialized.

There are different roles that deal specifically with data and there are roles that deal with analytics, he notes.

“It’s about using data and analytics to add value to the business, but traditionally we focused more on things like business intelligence; it was descriptive data about what was going on in the business, so people were using things like dashboards, etc.”

However, FNB has moved from descriptive analytics to predictive analytics and prescriptive analytics, which involves decision making.

“For example, most decisions in a bank are made automatically. From every payment made by a bank – and we make billions of payments a year – a decision model runs. He decides whether this payment can be fraudulent or not. He then makes the decision to block the payment or warn the person paying that it could be a fraudulent transaction.

These processes are now highly automated and require specific skills; it’s not just about computer skills, he adds.

“So it requires people with a background in data, whether it’s degrees in actuarial sciences, mathematics, economics and statistics, etc.”

FNB builds machine learning algorithms that improve over time. “We need the intelligence to give customers the right deals they need from a money management perspective.”

Sean N. Ayres