bankingciooutlook

Benefits of Data Analytics for Modern Banking

James Robertson, Banking CIO Outlook | Wednesday, June 23, 2021

BANKS USE BIG DATA TO PROVIDE CUSTOMERS WITH THE SERVICES THEY WANT

FREMONT, CA: Data has become a vital resource in a variety of sectors. It's particularly true in the financial services industry, where big data has created new opportunities for clients and employees.Knowing how banking and big data operate in practice necessitates familiarity with the technologies used to clean, collect, and analyze large amounts of data from various sources.

  • Big Data, Big Needs

The financial sector was one of the first to embrace big data analytics and apply it to strategic planning to spot market trends and achieve a competitive advantage. Predictive analytics enables speedier decision-making and long-term planning when deciding what products to give customers and when to sell them.When it comes to retail, AI mainly assists in driving this proactive strategy, preventing banking customer churn, and promoting best practices.

  • Sales and Marketing

Analytics are now driving direct marketing and sales activities in the banking business, demonstrating which initiatives will yield the most significant returns and how customer segmentation across categories may make cross-vertical marketing easier to handle.

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Cross-selling opportunities get identified using data analytics, allowing banks to bundle services better and build product bundles that appeal to people at different stages of their lives. Consumers upon this verge of purchasing a home, starting a family, or investing their money identified and targeted using precise language and imagery.

  • Customer Support

Customer support services are another area where data shines. Continuous data collection gives knowledge and understanding into the issues that consumers face. A knowledge base can be built and provide a self-service option if data shows that similar queries get routinely given to a given service department.The user experience can be improved by quickly resolving their issues utilizing data gained from previous interactions.

  • Fraud and Security

Fraud prevention and detection are among the most significant ways that data analysis has impacted the financial services business. Machine learning and AI's capacity to recognize trends in customer behavior and transactional data allow anomalies, identified and probed promptly.It enables the early detection of potentially fraudulent behavior, allowing banks to reduce fraud-related costs while also increasing client trust.

  • Data Centers

Banks require enterprise-grade infrastructure and massive storage capacity to access the necessary computational power to evaluate extensive data and discover new patterns. A data center can be costly, but it may be the most cost-effective solution to protect consumer privacy, financial data, and transactional data. However, to prevent unwanted access, security is paramount, and a zero-trust network is required.For small enterprises with scarce resources, storing the most confidential material on-premises while storing most of the company's data in the cloud may be recommended.

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