Humanity faces the problem of an ever-increasing flow of information every year. Creating and perfecting programs for its analysis and processing has become a necessity. Nowadays, big data plays a big role in various spheres of human activity, including finance.
Generally speaking, big data is a variety of methods, tools, and approaches. They are used for processing both structured and unstructured data. Different combinations of tools allow us to use them for solving certain tasks and purposes.
What Is Big Data in Finance?
Big data in the financial sphere is used for planning, forecasting, and personalization, as well as for ensuring customer loyalty, transaction security, and investment efficiency. There are some areas where big data are actively used:
- finance and loan companies;
- other financial services.
Nowadays, the human factor is not as important in these spheres as it was many years ago. Data analytics on the customers, their needs and pains, and their opinions about a certain type of financial service, bank, or insurance company are now collected by special programs.
One of the benefits of using big data in finance is the possibility to detect fraud signals. It also allows you to prevent illegal transactions. Software developed for big data is being improved constantly. Thus, banks and other financial institutions can have a guarantee of the safety of any financial transactions. The possibility of using biometric and digital identity are effective ways to protect financial activities. Nowadays face and voice recognition and fingerprint identification are as common as a signature.
The use of big data has long gone beyond the perception of the human brain. We cannot imagine our life without electronic or QR code payments, robotic consultants, marketplace lenders, and cryptocurrency. But it only became possible due to data science solutions.
One of the benefits of big data is employee engagement. Back office costs, the possibility of personal staff performance assessment, team spirit support are important for fruitful work of financial institutions.
Big data expands the limits of financial services. It allows making transactions faster and easier. Special tools developed for financial companies and institutions take care of risk management. A convenient system of mobile payments helps to attract more consumers and increase the income of all types of businesses. Big data in the financial sphere makes customer services work more efficiently, and as a result the number of satisfied clients grows every day.
Big Data in Banking
The sphere with the most demand for big data is banking. Not so long ago, banks only provided a small range of services including lending and deposits. The number of bank clients was so limited that the clerks knew each client by sight. It was a relationship built on trust.
Nowadays the number of clients and the variety of services makes it impossible for employees to know everything about their clients’ needs and financial situation. Moreover, a lot of banks have branches not only in their own country but all over the world. Big data makes the bank systems unified and holistic.
Credit history, financial transactions, history of contacting the call center and making payments can tell a lot about the banks’ clients.
Nowadays, mobile banks exist. They don’t have a network of branches around the world. These institutions do not rent offices and do not represent the banking system in its classical form. Any user with a smartphone or laptop can be a client of these banks. This became possible thanks to the use of big data and the development of special applications.
These kinds of banks can hire the best specialists from all over the world. Experience of living in pandemic lockdowns has shown that this is a good opportunity for both employers and employees.
The financial environment is so competitive that following the latest trends and implementing modern inventions is the only way to remain successful and profitable.
Big data in the financial sphere solves a lot of problems at the same time. It is necessary to protect clients and financial institutions from fraud. Its implementation helps to provide quality services and expand the global reach. It is effectively used for consumer segmentation and reporting. Big data is a well-proven way to manage risks and secure transactions. It is a way to improve the work of financial institutions and be competitive in the modern world of new technologies.