Big data and advanced analytics are reinventing the banking sector and delivering better customer experiences. Many financial institutions have started combining and utilizing their internal datasets such as credit and debit transactions, channel and communication preferences among other datasets. Financial institutions including banks also collect data from external sources such as websites, social media activities, and phone call logs. These types of datasets can help banks with insights to understand customer needs effectively.
Big data and advanced analytics technologies help in developing algorithms around product or service data. These algorithms allow the banks to understand the customers' perception on the products or services. Analyzing the responses from the customers, banks recommend solutions that help in reducing customer churn, up-sell and cross-sell products, which proactively helps in detecting frauds.
These technologies make targeted marketing, personalized wealth management, and optimized transaction processing possible while also assessing regulatory risks. It plays a significant role in reinforcing risk management in areas such as financial crime compliance, card fraud detection, credit scoring, and cyber analytics. The main objective of big data and advanced analytics is to gain insights and knowledge from data to make strategic decisions.
With big data and analytical techniques, banks are now able to understand customer relationships by analyzing their ever-changing interactional and transactional behaviors. This enables the banks to target customers effectively and improve customer engagement through digital marketing platforms such as websites, e-mail, mobile apps, and social media networks.
For banks and financial institutions to gain and maintain a competitive edge in the big data and advanced analytics space, they need to identify the aspects of the big data trends actively. Such steps will be a right fit for the banks to advance their businesses strategy. Not every bit of data, but relevant data coupled with innovative big data and advanced analytics will prove transformational for the financial industry.