Big Data doesn’t just help with making the right decisions, it often delivers insights into processes and systems. All organizations may benefit by streamlining their financial and accounting departments. Big Data offers the right tools and techniques to optimize operations, enhance effectiveness and mitigate financial vulnerabilities. Forbes magazine offers a complete introduction to the potential of Big Data analytics here.
The Compliance Benefits
Big Data insights will help boost financial data efficiency, accuracy, and integrity. Many business leaders are now more concerned with managing financial risks and regulatory concerns. Each year, business leaders are confronted with new regulatory challenges and requirements. This is especially true in the non-profit, financial, investment and health care sectors. Government authorities now require more detailed facts within short deadlines. Big Data allows business leaders to easily generate customized reports in more dynamic and agile ways. Technology integration and Big Data facilitate the integration of legal, accounting, financial analysis, risk management and human resource departments.
How Banks are Profiting from Big Data
Bank and financial firm profitability has steadily been on the rise in stable economies. These organizations can only achieve operational efficiency, better risk management, and improved customer service through consistent revenue and market growth. For example, many banks are expanding online wealth management portfolios to lower risks, differentiate services and offer consistent fees. Big Data allows bank management to access a plethora of data sources. This internal data may be mined from ATMs, credit cards, call centers, client portfolios, brokerage reports, mortgage applications and web-based platforms. There is also new data available through external sources like news, mobile devices, industry reports and social media posts.
Risk and Capital Management Enhancement
Traditional enterprise applications help financial services companies manage credit, market liquidity, capital needs and regulatory requirements. Big Data provides insights into new credit analysis and behavioral scoring tools to classify new and reclassify existing customers’ credit worthiness. Many banks and financial firms are entering the unfamiliar markets, such as micro-credit loans, but there is limited credit data available. This dearth of data scarcity can be successfully managed through Big Data-based predictive modeling using non-traditional sources. On the other hand, the comprehensive valuation of complex portfolios requires the simulation of thousands of risk factors and scenario models. Big Data drastically improves the quality of analysis queries for risk management purposes.
Big Data continues to help the consumer banking, financial and investment services industries through supplying new data warehouses, transformative models, better business intelligence tools and more accurate predictive capabilities.