The Financial Industry is Molded by Big Data Technologies

Featured article by Andre Smith, Internet Marketing and E-Commerce specialist

With the advent of modern technology, every interaction that people have is slowly being absorbed into the digital world. People can send and receive money with just a few taps on a smartphone. Everyday consumers can now use apps to invest in varying options that were once much more difficult to locate and purchase. One of the only negative side-effects of this progress is the accumulation of vast datasets that many businesses don’t know how to properly use to maximize their potential.

However, the Big Data industry has started to expand to meet the needs of businesses with overwhelming amounts of data. It has been estimated that Big Data markets will continue to grow at a rate of at least 23 percent annually until 2019, and the financial sector is driving the vast majority of that growth. Big Data is certainly having a profound effect on the financial industry.

Improved Efficacy of Financial Professionals

Big Data provides investment managers with the ability to analyze and react to consumer habits before others even realize those habits exist. Insights taken from the analysis of Big Data make it easier for those in the financial industry to have an edge over those who don’t take advantage of Big Data technologies. This advantage is most likely only temporary since many such insights will eventually be discovered by others, thus making them worthless.

Drives Customer-Centered Experiences

By taking advantage of Big Data services, banks and other financial institutions can create a much more focused experience for the customer. This can be accomplished through customized financial products, one-on-one communication with the customer, and more targeted services for individual customers. This will help promote loyalty throughout the customer base, which improves revenue and reputation.

Before the advent of Big Data in the financial sector, banks were forced to view their customers through the narrow lens of incomplete or disjointed data. Now banks have the ability to analyze huge sets of data in order to find insights that can improve their decision making strategies. New customers can be drawn in via targeted marketing, and customer retention can be improved through personalized experiences.

These insights are forcing banks to completely change the way they deal with financing if they want to remain viable in the market. Customer interactions can be tracked in order to promote the optimal communication with those customers, which in turn promotes their continued loyalty and their satisfaction with the business. For instance, if a payday loan provider uses Big Data insights to determine how their customers typically use their loans, they can market those direct services to other potential customers.

Customer Protection

Big Data is also unique in that it provides a method of protecting customers from fraud. By tracking the standard behavior of their customers, businesses that take advantage of Big Data can ensure the protection of their customer’s data and identity. Authentication becomes much easier when there is more than a simple password protecting a customer’s account. Consumers like to know that they are protected from fraud and theft, and financial institutions that use Big Data offer some of the most secure services in the industry.

In-Depth Financial Profiles

For the longest time, banks and other commercial lenders were only able to make decisions based on limited information about the loan recipient, such as their credit score and personal income. Big Data provides these institutions with additional customer information so they can more accurately determine if an applicant is capable of repaying a loan. While that doesn’t sound very important, it actually means that more loan applicants will receive loans since the lender will see a broader scope of their financial responsibility.