Top 5 Ways How Data Analytics is Helping Banking Systems
Banking and Financial services are considered as the newest clients of Data Analytics, and probably this is because of the fact that banks tend to keep their data confidential. But now that they have realized that with the help of data analytics, they can work with the Big Data and use it to increase their business and provide better services to their customers. As an estimate, more than 40% of the banks are ready to embrace data analytics in their systems.
Advantages of Data Analytics in Banking
a. Risk Management: Banking systems always have the risk of losing money when they give out loans. With the help of analytics tools, they can keep track of which of their customers are going to back the loans and which ones are going to mess up. Keeping track of behavior and purchasing habits is also easy through Data Analytics. Banks can also asses the future trends of the market based on the data and decide if they need to increase or decrease the interest rates. Data analytics also helps in reducing the errors of data entry and identify problems in consumers’ data.
b. Reducing Frauds: Banks are the most fraud-prone industries in the world. Every year, billions of dollars are lost because of frauds. Data analytics can help banks in detecting the suspicious transactions and they can take actions in advance to stop such activities.
c. Tracking Consumers’ Behaviors and Personalized Service: Not everyone’s financial goals are the same, and so this is important for banks to understand the conditions and goals of every customer in order to bring them the right service and investment solutions. Data analytics can also help the banks in categorizing their customers and focusing mostly on those who are going to be prospective for them.
d. Engagement of Employees: Employees are one of the most important pillars of any industry, and it is very important to identify the best employees and take measures to increase the efficiency of poor workers. Data analysis can help in analyzing employee performances. Companies can identify the best performers and praise them while helping the bad performers in improving their productivity. This is also helpful in reducing employee attrition.
e. Regulatory Compliance: According to the surveys, regulatory compliance is the biggest worries of as many as 68% of employees involved in the banking industry. The advanced BI tools can help in keeping track of regulatory requirement and they can scan through each and every file to check if they meet the compliance or not.
Scope of Data Analytics in Banking
Data analytics is having a big impact on all the major industries, and banking is one of them. According to Harvard University, no industry can ignore the importance of Data Analytics. Banks and Financial institutions need data professionals in large numbers, but currently, there’s a huge scarcity of data professionals. This, however, is good news for those who have appeared in this field, as the opportunities are endless.