If you look at the general fintech statistics, they will be surprised by the numbers. The financial services sector is expected to grow by 25% per year, reaching 310 billion dollars by 2022. Although the pandemic has been a blow to hundreds of industries, financial institutions have managed to overcome this wave through wide and rapid adoption of innovation, among which predictive analytics has a special place. But how exactly can predictive analytics in financial services help improve industry agility?
A few words about predictive analytics
In the age of big data, it is humanly impossible to perform business analysis, calculate risk and create prediction models manually. Since the financial sector is considered to be the most data-intensive sector in the global economy, predictive analytics is one of the most vital technologies that data science can offer to thoughtfully manage and use these data. terabytes of valuable customer data. Predictive analytics itself is a very complex technology based on specific machine learning models and algorithms that allow software to perform business analysis processes as crucial as risk management, data analysis client, strategic planning and many more.
Predictive analytics for financial services
Finance is where accurate forecasting saves billions of dollars and one miscalculation can lead to disaster. As the industry becomes more and more versatile, the application of predictive analytics is not limited to strategic planning.
Elimination of fraud
Any industry that deals with providing customer service values the personal data of customers above all else. Needless to say, the information that financial institutions get from their customers is the top priority, being in direct correlation with its image and reputation. Thus, a single fraud will inevitably result in the financial and public “death” of an organization. To avoid such consequences, predictive software can help detect fraudulent actions and suspicious customer behavior at an early stage, leaving no chance for cybercrime.
Risk management on point
More than three quarters of the risks in the financial industry are related to the development of a wrong or inaccurate customer image. Hundreds of factors must be taken into account in determining whether a person is reliable and creditworthy. InData Labs provides predictive analytics software in financial services that are not “human factor” sensitive and have access to almost any type of digital data describing a client’s actions both vis-à-vis financial institutions and social media. This volume of collected data is minutely analyzed via prediction models and the final verdict comes out flawless, saving considerable sums on future risks.
Before launching a product, any industry does extensive customer research, based on the data they get on a daily basis. When it comes to introducing new financial products, the datasets seem to be much larger and the customer value systems to be more complex. And again, there’s no better tool than predictive analytics to make sure every new campaign hits the mark.
Improved customer understanding
Any financial services institution, like any modern business in general, depends directly on its customers. So the idea of racking up millions of bytes of data to stay in tune with the people your business relies on seems reasonable. New trends are born every day, people are drawn to and worried about things that were not there before. That is why predictive analytics in financial services is essential to be able to feel the change in customer behavior and values to continue to make products and services relevant to the public.
The final thought
The recent change in the global service industry has taught us a valuable lesson to always be able to count on Plan B. With the true flower of artificial intelligence, it is now simply inexcusable to ignore the capacity for innovation and its undeniable power for positive change. The financial sector has already shed its sluggishness and old-fashioned conservatism to make way for cutting-edge technology to serve the customer experience. Predictive analytics in financial services is now at the heart of the industry, successfully proving that only those who know how to work with data really run the world of money.