Undoubtedly, Big Data has closely integrated with the financial services industry, and it’s very likely to keep on driving future innovation. Stay with us to learn what is the role of Big Data in finance, and which significant challenges it might present.

1. Big Data in Finance: a Brief Overview

Being a real buzzword these days, the term ‘Big Data’ entails large volumes of data that carry on increasing exponentially, as well as approaches to its collection, processing and analytics. According to IBM data scientists, Big Data is based upon ‘4V’s’ volume, variety, velocity and veracity.

Work means the scale of data; combination implies its diverse forms, the rate stands for the acceleration at which data is the store and analyzed, and finally comes integrity, which might be questionable.

It comes without saying that the financial services industry is one of the most data-intensive sectors of the global economy, so the role of Big Data in this area is enormous.

2. How Big Data Is Disrupting Finance

Big Data gives a competitive advantage to companies, enabling them to work faster and more efficiently. In this section, we’ll walk you through the most common application of Big Data in the financial sector.

a. Customer Acquisition and Retention

Let’s be honest: the consumer has always been the critical point of any business. Therefore, banks and financial markets leverage Big Data to collect information that helps identify trends and get insights for predicting customer behaviour and providing better service.

By understanding customer needs, companies get clues on how they can generate more leads, improve their products and services, and increase customer satisfaction. BankMobile, a digital U.S. bank, which partners with universities to get new clients, uses Big Data to easily monitor the effectiveness of these partnerships, its customer acquisition costs, fraud, and also process whopping amounts of customer feedback.

b. Smart Stock Market Insights

Big Data has changed how stock markets across the globe used to operate, as well as the approach to making investment decisions.

Machine learning provides accurate forecasts at lightning speed, enabling analysts to make the best decisions. In essence, paired with algorithmic trading, Big Data looks incredibly promising for the trading sector.

c. Enhanced Analytics

Big Data analytics is here to enhance predictive modelling for more efficient assessment of the outcomes on investments. Big Data, coupled with improved algorithmic understanding, gives way to more accurate predictions and the ability to alleviate issues related to trading.

d. Identification of Potential Risks

As finance industry players operate in high-risk environments, they are in constant need of risk management solutions.

Big Data is a fundamental mechanism in risk management as it copes with evaluating data from multiple sources. This approach allows for tracking, detecting, and alleviating risks that might exert adverse effects on the operations.

e. Fraud Management

With predictive analysis, Big Data allows for detecting fraudulent activities, and many pioneering organizations have already adopted this approach.

For instance, Alibaba Group developed a fraud risk management system that is based upon real-time Big Data processing. The system analyses large volumes of consumer data in real-time and detects fraudulent transactions.

3. Big Data Challenges

a. Data Growth

The most significant challenge related to Big Data is its enormous volumes that might be difficult to store and analyze. Also, a great deal of data is unstructured, like documents, audio or photos, e.i.

It doesn’t reside in a database and can be challenging to search and process. Therefore, banks have to invest in the Big Data technologies to support the new use cases, for instance, in NoSQL.

It includes an array of different database technologies that provide a mechanism for accumulation and retrieval of data. A NoSQL database can store unstructured data and give a faster performance, offering flexibility while handling multiple types of data at a massive scale.

b. Big Data Consolidation

Next, data typically exists in separate systems, which makes it difficult to centralize. To extract data from those systems, Big Data requires a near real-time delivery, presenting a challenge for Fintech.

c. Potential Security Issues

Security is another concern related to Big Data. Because of data centralization out of the protected systems, data security might become questionable. Plus, Big Data stores can become sensitive to hacker attacks. All in all, the financial industry needs reliable solutions to ensure maximum data security.

d. Managing Data from Diverse Sources

Also, Fintech has to face the challenge of data integration as the data you need to interpret usually originates from various sources and in multiple formats. As an example, an eCommerce company needs to analyze data from website logs, social media and call-centres. These data formats differ, and it can be challenging to integrate them.

e. Maintaining Regulatory Compliance

Financial institutions have to keep an eye on the legal restrictions that apply to data collection and processing. For instance, the European Global Data Protection Regulation requires that organizations can store personal data only when there is a direct use for it, the customer being in full control of the data.

4. Summary

In essence, Big Data is genuinely revolutionizing the financial services industry, allowing for improved analytics, anticipating risks and fighting fraud. Still, some challenges need to be tackled to expand efficiency and provide better solutions.

The post Big Data in Finance services – Overview, Applications, Challenges appeared first on Technology News & Trends.

If you’re not using the right strategies and tools, you’ll miss out on making the most out of your data and essentially hinder the growth of your business.

With the right business intelligence platform, however, you can build out scalable data analysis processes, empowered by information delivery methods such as dashboards and reports and integrations to gain actionable insights to improve your business.

In this guide, we’ll take a look at several ways in which working with the right business intelligence (BI) platform can support you make better strategic business decisions.

1. Streamline data collection and analysis

Data is the cornerstone of your business intelligence strategies. However, the process of gathering and analyzing data to refine your processes and make better business decisions is a time-consuming and labor-intensive task.

With the right business intelligence software, you can work with dynamic and robust analytics that you can adapt as your BI strategies grow.

Plus, your BI app can help you extract information from raw data rapidly, so you won’t spend a bulk of your time, energy, and resources on collection, entry, control, analysis, and use – which can give you instant access to essential info through advanced real-time reports.

This streamlines the data collection, management, and analysis process – allowing you to use your data efficiently, get better results, and make data-driven business decisions quicker.

Although there are many considerations when moving large volumes of data, there are cloud migration benefits, risks, and solutions when you work with the right BI platform.

Additionally, your BI platform can help you to establish a data structure that makes organizing, processing, storing, and retrieving information easily, which lets you generate reports efficiently.

2.Optimize your sales strategies

There do several things that go into developing an effective sales strategy. An effective one that brings meaningful results requires ample research and execution.

With the help of your BI platform, you can get all the necessary data related to your budget plans, sales numbers, turnover, competitors, and more. Equipped with these data sets, you can improve and refine your sales strategies, allowing you to see continuous growth in sales.

For instance, using a great BI platform can help you discover sales trends based on your customers’ online shopping experiences, preferences, purchasing habits, reactions to promotions, and other patterns that affect your sales.

With your sales data, you can identify declining customers and implement repositioning strategies, determine the best customers – including where you can find them and the most effective acquisition and conversion methods, allowing you to decide on the right products for cross-selling.

By drilling down on your data, you’ll get the insights that your business needs to optimize your sales strategies and avoid (or drastically reduce) your missed sales opportunities.

3. Get quick access to customer insights.

BI platforms can integrate all of your customer data from your marketing automation software, CRM, website engagements, and social media campaigns into a single centralized dashboard.

This means that you won’t need to go through various platforms to manage your customer data. Instead, you can monitor them from a suitable location that’s easy to keep tabs on at a glance.

BI platform capabilities such as this are crucial because it makes accessing insights faster and easier, without needing to pour your work hours and workforce into scouring multiple channels that your customers interact with.

Instead, you’ll get a holistic picture of your consumers and their interactions with your business in one platform. After all, you’ll need a comprehensive view of your customer data to meet consumer needs and tailor your solutions, approach, and marketing efforts effectively.

In a nutshell, the right BI platform can help you access and use your customer insights efficiently to make data-driven decisions to boost your strategies, ensure you don’t waste your efforts, and improve your ROI.

4. Perform data-based assessments of your marketing strategies

Monitoring trends to identify your customers’ preferences is vital to developing strategic marketing decisions. With BI platforms that offer powerful analytics integrations, you can review your campaign outcomes across touchpoints and identify your promotional returns.

This helps you decide how you can tailor your promotions, prioritize your campaigns, engage audiences through social media platforms effectively, and, overall, maximize your marketing efforts.

BI software can take the complexity out of tracking and assessing the success of your marketing strategies by letting you monitor your dashboards in real-time, set up alerts on your KPIs for automatic updates for any changes, and give your team access to all your data insights.

Apps for BI can also simplify the process of evaluating your marketing expenditures through analytical reports that can help you determine your least effective campaigns and adjust your budget accordingly.

Armed with this information, you can make data-based assessments to check if you’re getting the best ROI for your marketing efforts and make strategic decisions regarding future investments and emphases.

5. Get a comprehensive view of your business.

Essentially, the key to making better strategic decisions is to transform your customer and business data into actionable insights.

BI platforms enable this by helping you get a consolidated view of your business and consumers from a centralized app – regardless of which channels your data comes from and touchpoints your consumers use to interact with your brand.

Not only can a holistic view help you address customer needs and enhance your strategies, but it will also help you make your business model more stable and results-oriented.

Instead of relying only on outcomes to determine your next moves, BI platforms help you map your data, study market trends, and perform in-depth analytics so you can build a more effective business strategy to grow your company.

6. The Bottom Line

With the help of reliable BI platforms, business owners can now have a better understanding of the condition of their business.

It becomes easier for them to uncover areas that ought to be improved and those that are generating meaningful results – which ultimately helps them put together sound business decisions that are likely to yield the highest profits.

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