In the time of digital excellence where data-driven approach is the need of the hour, the
financial and banking sector needs to incorporate data analytics. Mordor Intelligence has projected that big data analytics in the Banking Market Size to reach USD 24.28 billion by 2029 at 23.11% CAGR, during the forecast period (2024-2029). Banks generate enormous data every day. Harnessing the power of big data to gain data-driven insights for making smart decisions is imperative for the sector. In this article, we will explore how data and analytics are revolutionizing the financial &
banking sector.
Top 5 Benefits of Data Analytics in Banking & Financial Sector
Data Analytics can empower the banking sector by unlocking customer and financial data. With globalization already taking place, navigating through the competitive landscape necessitates the utilization of data and analytics for the sector. The following are the advantages of data analysis for the sector:
Fraud Detection
Analysis of data enables the detection and prevention of fraudulent activities. It can evaluate large datasets to identify hidden patterns and anomalies that otherwise can go unnoticed. Big data analytics can automate Albert's Hibernation Process to detect financial fraud. By analyzing vast historical data, predictive analytics can help to predict potential red flags and fraud in advance. Banks and financial institutions can actively monitor transactions, identify any deviations, and take proactive measures to safeguard customers and financial institutions.
Streamlined Operations
In our experience, utilizing big data and analytics in banking can save time by around 25%. It can automate manual tasks like data entry, account management, and evaluating loan approval. This will help in optimizing resource allocation across various branches. Analyzing data to understand different patterns can help financial institutions to identify bottlenecks, redundancies, and areas of improvement. Banks can make data-driven decisions to streamline workflows, eliminate bottlenecks, and save time.
Risk Management
Data analysis can assist banks in mitigating credit risk by analyzing burrowers' creditworthiness based on credit rating, financial history, and fraud attempts. It will help banks to make data-driven decisions for granting loans. Employing predictive analytics can help mitigate market risk in advance by anticipating fluctuations in the stock market, foreign exchange rates, interest rates, and commodity prices. Big data and analytics can detect suspicious transactions and pinpoint chances of theft. This will help in mitigating operational risk and preventing financial loss due to system failure, fraud, or manual error.
Customer Analytics
Big data plays an important role in understanding customers’ behavior and preferences. It can assist banks and financial institutions in customer segmentation according to their behavioral patterns, transaction history, and demography. Utilizing data-driven insights based on customer segmentation can help in creating personalized marketing campaigns. It can also be utilized for offering personalized financial advice and services to meet the specific needs and demands of the customers. Data and analytics can enhance customer support service and quickly address issues by analyzing user experience, transactions, and interactions. This will help in improving customer experience and increasing customer retention.
Data-driven Regulatory Compliance
Regulatory compliance including
KYC (Know Your Customer) and AML (Anti-Money Laundering) is crucial for the banking & financial sector to prevent financial crime. Big data analytics enables regulatory compliance by analyzing customer data, automating report generation, and monitoring financial transactions. It also facilitates the quick update of the compliance. Data Analysis can detect compliance gaps and quickly modify the regulatory compliance according to evolving needs. It assures adherence to regulatory standards, thereby, strengthening stability and security of the banking sector.
Final Words
Big data and advanced analytics are significantly impacting the banking and financial sector. From fraud detection to regulatory compliance, data analytics services are reshaping the landscape of the sector. It has helped our clients in streamlining operations and improving customer experience. Schedule a meeting with our experts to learn more about the advantages of
data analytics in the banking sector and how our data-driven solutions can boost your business.
Spiral Mantra is a leading software development company that has successfully collaborated with Fortune 500 companies, enterprises, and startups.
