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Big Data Analytics: Enhancing Financial Service Efficiency

Enhancing Financial Service Efficiency

By ragulramPublished about a year ago 4 min read
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Enhancing Financial Service Efficiency

Big data analytics is a comprehensive method of studying vast amounts of data to discover information such as data correlations, hidden patterns, market trends, and consumer preferences that assist organizations in making informed business decisions.

It is a sort of advanced analytics that involves composite applications that include significant parts such as predictive models, statistical algorithms, and what-if analysis that are powered by analytics systems.

Big data analysis methodology

The four steps of big data analytics are as follows:

Data Collection: Data professionals collect various semi-structured and unstructured data from various sources such as web clickstream data, web server logs, cloud data, mobile applications, social media content, survey responses, mobile phone records, and more. On that day.

Data processing: After collecting and storing data in a data warehouse or data lake, data professionals organize, structure, and segment the data for analytical queries. Analytical queries require accurate data preparation and processing to achieve optimal performance.

Data Cleaning: Data experts clean data using scripting tools or data quality software. They look for mistakes or inconsistencies in the data, such as redundancy or design errors, before classifying and cleaning the data.

Data Analysis: Analysis is done using clean data analysis tools. These include data mining tools (for looking for patterns and relationships in data sets), predictive analytics (models for predicting customer behavior), machine learning (methods for analyzing large data sets), text processing and statistical analysis software, and data visualization tools.

Examples and applications of big data analytics

Big data analytics can help businesses in a variety of ways. Among them:

Tailored ads: Data personalization and analytics from sources such as previous purchases, interaction habits, and product page visit history data help create targeted ad campaigns that appeal to customers.

Customer Acquisition and Retention: Customer data analysis helps businesses' marketing efforts by identifying trends that promote customer happiness. For example, companies like Amazon and Netflix have created personalized pages to improve user experiences.

The decision to product development: Big data analytics provide relevant insights to alert product feasibility, development decisions, progress measurement, and product upgrades based on customer demands.

Pricing Optimization: To maximize revenue, retailers use data from various data sources and model data to select pricing models.

Supply chain and channel analytics: Predictive analytics models can help with advanced replenishment, B2B supplier networks, inventory management, route optimization, and delivery notification.

Risk management: Big data analytics aid in the identification of new dangers based on data patterns, allowing for more effective risk management techniques.

Improved decision-making: Insights gathered from relevant data can assist businesses in making faster and better decisions.

Benefits of Big Data in Banking

Banks benefit from big data in many ways. Some of them are listed below:

Risk Management- Banks use big data analytics to analyze market trends and consumer data records:

  • Begin determining interest rates
  • Identify and avoid lending to customers with poor credit scores.
  • Detect Fraud and Prevent Risky Activities

Personalized banking solutions - Banks use big data analytics to identify consumer behavior based on inputs such as investment, shopping trends, or financial history. Banks can develop strategies to retain customers while attracting new customers by offering customized solutions.

Internal process optimization and streamlining – Using big data analytics, banks can improve their efficiency while reducing operating costs.

Customer feedback analysis - Customer service departments in banks are often overburdened. Big data technologies enable us to respond to consumers quickly and adequately by helping to scan large volumes of data and create a master database. This urgency makes customers feel valued.

Overall performance improves - Big data analytics helps analyze employee performance against goals and recommend strategies to measure more effectively.

Big data analytics issues

Some difficulties related to its use in banking. Some of them are as follows:

Struggle with legacy systems – The banking industry has been slow to change. Many banking systems are struggling to cope with the increasing workload. There is a risk of system instability when collecting, storing, and analyzing data using the antiquated infrastructure.

Security Issues - Banks deal with massive amounts of data. Banking service providers must ensure that the amount of user data collected and the process followed is secure.

Data quality management - With a big volume of data coming in from a variety of sources and in organized and unstructured formats, managing data quality takes a significant amount of time, effort, and resources.

Choosing the correct tools - There are numerous Big Data Analytics tools and platforms on the market, making it difficult for banks to select the best solution that meets users' expectations and infrastructure.

Conclusion

Big data analytics are now being adopted in various parts of the banking industry to help them provide better services to their customers internally and externally and improve their active and passive security measures.

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