Every industry has plenty of data, especially financial services industry that has a lot of customers data and other sources of data. However, having plenty of data does not mean that they all have managed it well, because most companies do not implement certain strategies to manage their data.
Those challenges happen because most people think that data analytics is hard, and will be two times harder if they have huge amount of data. In fact, they do not need to think about it because they can get the insights from the data they have with data analytics platform.
In this article, we will find the answer of the questions “what are the benefits of data analytics for financial services industry?” These answers will be useful for practitioners who are in financial services industry. Here is the details:
1. Measuring credit risk
Risk assessment is a top priority for financial services industry, as it helps companies to manage financial activities and decide the right financial investment.
With data analytics, you can similarly screening a candidate for a loan by understanding the spending patterns and previous credit history you can identify behavioral trends of customers and lending to right customers with low credit risk.
2. Improving performance
With data analytics platform, financial services industry can track business, teams and HR performance easily. Moreover, it can enhance business processes as much as possible to meet the business objectives, reduce the attrition and improve the performance.
3. Determining customer segmentation
With data analytics, financial services industry can get customers’ historical data regarding the ir spending patterns. Through this data, financial services industry can segment the customers according to the income, expenditure, the risk, and provide personalized services to each customer based on segmentation.
It’s important to differentiate between the customers that give you advantages and the customers that give you disadvantages. Then, with data analytics, financial services industry can understand the profitability of each customers to concentrate on selling the right product and services to the right customers.
4. Cut down the risk of fraudulent
Fraud is the most dangerous attack for financial services industry. With data analytics, FSI can easily avoid fraud because they will know the usual spending patterns of customers. So that it helps raise a sign if something outrageous happens. If there is a sudden increase in the expenditure of a cautious customer, they can cut down the risk of fraudulent actions in ral-time.
5. Knowing Customer’s Lifetime Value
Customer’s lifetime value (CLV) is how long the businesses are able to retain their customers. It is the measurement of forecasting the value of each customer.
By implementing data analytics, financial services industry can analyze the right CLV. The right CLV gives advantages both for companies and customers. With the right CLV, companies can maximize the value of each customer for their products and customers will get personalized services, because they will only be offered bank’s services based on their preferences. If they implement it properly, getting more customer loyalty is not as difficult as they think.
After understanding the benefits of data analytics for financial services industry, now it is time to take the next step for implementing data analytics platform that helps you managing your company’s data. Start your implementation with the right IT partner who has credibility and good reputation in data analytics implementation.
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