In the finance sector, there is a huge proliferation of data on a daily basis on a large number of diverse accounts, business or personal. This leads to a snowballing technological complexity when it comes to analyzing such magnanimous amounts of data, especially manually.
However, without proper analysis, it will affect the operation, performance as well as the level of competence of the different machinery of this sector. This warrant for a transformation in the analytical process of the banks and other financial institutions and software and tools like big data can bring in such transformation.
According to research, it is seen that over the past couple of years 90% of all in the world is created due to the creation of 2.5 quintillion bytes of data and this happens on a daily basis. This is commonly referred to as ‘Big Data’ which gave rise to the software by the same name which provides the financial services providers with a lot of benefits.
- This big data analytical tool is capable of handling such an immense amount of data quickly
- It facilitates the storage of such a large amount of data with the help of cloud computing
- It helps the finance industry to stay competitive and up with the rapid growth
- It creates better opportunities for collection, processing, and analysis of both structured as well as unstructured data in quick time and in real time
- It helps the lenders to make better loaning and investment decisions
- It reduces the chances of defaults due to proper risk assessment.
The insiders of the industry say that big data and its extensive use in the finance industry will continue to impact it in a positive way and drive innovation and better prospects well into the future.
All financial companies of today and even other non-bank financial services providers such as Nationaldebtrelief.com and others can leverage big data to get help in different aspects of their service and operations. These are:
- To generate new revenue streams
- To make more data-driven offers
- To make more personalized recommendations
- To increase their efficiency to compete with the FinTech companies
- To provide superior services in banking and financing
- To ensure exceptional customer service using the cutting edge technology and
- To strengthen security to make transactions safer.
It is a well-accepted fact that data can disrupt the financial services industry but with the growth and success of big data, most of the financial companies have been successful to keep up with the constant changes of the industry.
Rapid rise of big data
All successful financial companies are using big data to their fullest advantage which has paved the path for its stupendous rise to success. Though there are still several financial services organizations that are resistant to and apprehensive about such a change but it is a fact that it is not going to go anywhere sooner or later.
If you consider it on a worldwide scale you will see that a large number of financial companies are using and an equally large number of companies are purchasing Big Data and Business Analytics solutions.
- IDC reports confirm that the worldwide revenues for BDA will be more than $203 billion in 2020.
- The same report says that the banking industry is one of the top five biggest drivers of such a growth of big data.
These facts signify the prospects and potential of big data.
Matching with FinTech companies
Big data is typically used by the FinTech companies extensively that helps in ways more than one.
- Use of big data will offer supreme levels of convenience to the finance companies as it will help them to eliminate the most commonly associated friction for customers and increase their revenues.
- It has allowed the customers to participate in P2P or peer to peer lending and also make online payments easily.
In contrast, the traditional financial firms cannot offer such type of services as the FinTech companies due to the lack of infrastructural support. They rely mostly on traditional applications and methods that are not enough to let them know how a customer really is. That is because they rely mostly on surveys instead of real-time data that cannot provide accurate analytics as big data can regarding how their customers are responding to their services.
This means, embracing big data is the only way in which the traditional financial firms can catch and match up to FinTech companies that will help them survive the competition.
Benefits of using big data
There are lots of benefits finance companies, traditional and conventional, can enjoy for their business development and success.
- With the use of big data analytics, traditional financial firms will not fall behind and will be able to act in the same way as those few forward-thinking companies do.
- The firms can take useful steps to make the most out of big data. This will save them a lot of money and time in the process.
- They will be able to harness the power of using a converged data platform that will help them to win the race with more accurately analyzed data.
Ideally, a converged data platform will break down all those data silos. It will allow them to store, organize and analyze all the data available within the system. This will lead to faster results, more innovation, better collaboration and easy access to data.
Make a plan
With all that benefits and prospects of big data that both traditional and other companies can accomplish with the help of big data, financial companies simply have to make sure that they use the right data platform to connect. This platform should not only be secure but should also be flexible and scalable to collect more data, process them in real time, have role-based access and monitor data usage at a more granular level.
Last but not least, they should also design a better plan to follow and act on it to make the most of big data. This will help to define their data strategy and align it with their goals.
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