Banks Benefit from Using Data analytics
Data analytics is helping the banking industry become smarter in managing the myriad challenges it faces. While basic reporting and descriptive analytics continues to be a must-have for banks, advanced predictive and prescriptive analytics are now starting to generate powerful insights, resulting in significant business impact.
Data analytics-backed solutions are enabling banks to not only manage the increasing cost of compliance, but also the risk (both monetary and reputational) of non-compliance. Product and portfolio optimization modeling is helping banks achieve profitable growth in an environment with significant volatility across asset classes and rising losses in traditional banking products.
Sophisticated risk modeling presents a powerful way to understand short- and long-term profitability and capital adequacy or, in other words, chances of bank’s survival in future. Fraud and AML/KYC analytics are helping banks stay ahead of fraudsters, drug cartels, terrorists, organized mafia, and others in preventing money laundering and associated potential losses. Consumer behavior and marketing analytics are driving sustainable competitive advantage in an era with eroding product differentiation, waning customer loyalty, and exploding volume, velocity, and variety of data.