OKIRIZA WIBISONO | Big Data Analyst, Bank Indonesia
HIDAYAH DHINI ARI | Head of Digital Data Statistics and Big Data Analytics Development Division, Bank Indonesia
ANGGRAINI WIDJANARTI | Big Data Analyst, Bank Indonesia
ALVIN ANDHIKA ZULEN | Big Data Analyst, Bank Indonesia
BRUNO TISSOT | Head of Statistics and Research Support, BIS, and Head of the IFC Secretariat
Information and the internet technology have fostered new web-based services that affect every facet of today’s economic and financial activity. For their part, central banks face a surge in “financial big datasets”, reflecting the combination of new, rapidly developing electronic footprints as well as large and growing financial, administrative, and commercial records. This phenomenon has the potential to strengthen analysis for decision-making, by providing more complete, immediate, and granular information as a complement to “traditional” macroeconomic indicators. To this end, a number of techniques are being developed, often referred to as “big data analytics” and “artificial intelligence”. However, getting the most out of these new developments is no trivial task. Central banks, like other public authorities, face numerous challenges, especially in handling these new data and using them for policy purposes. This paper covers three main topics discussing these issues: the main big data sources and associated analytical techniques that are relevant for central banks, the type of insights that can be provided by big data, and how big data is actually used in crafting policy.