Big Data Scoring a cutting edge solution for the financial industry

August 2, 2016

Financial technology, or FinTech, applies to any innovation in the financial areas including investments, retail banking, lending and many other segments. With the internet and mobile revolution FinTech has turbulently grown. When it comes to innovation in the financial sector Big Data Scoring is a key aspect that will drive the financial industry to new heights.

The amount of digital information created globally in 2005 was less than 0.2 of zettabyte. In 2020, the world is expected to produce totally more than 34 zettabytes of digital information. Under the latest International Data Corporation (IDC) forecast, the market for big data companies is expected to grow to $48.6 billion in 2019 having a compound annual growth rate of 23.1%.

 What is Big Data Scoring?

 Big Data Scoring is an easy-to-integrate, cloud-based service that lets consumer lenders improve loan quality and acceptance rates through the use of big data.

Credit scores are useful in determining who gets loans, but they are far from perfect. Information from credit bureaus is not always enough to make the correct credit decision. To improve your loan acceptance rates and credit quality, Big Data Scoring can help. Thousands of pieces of data, from a variety of online sources – such as social media, Google search terms, IP address and device used – on the loan applicant and links it with their behaviour on your web site. From this– in a matter of seconds – accurately predict the potential client’s payment behaviour, helping your company make informed and more profitable credit decisions.

Successful big data scoring at work:

  • Kreditech is a company out of the UK, started in 2012, that is built and branded on using big data to create a credit score for its customers. They seek to serve the “underbanked” by offering credit to customers who would most likely be turned away at traditional financial institutions, and they do it with technology.
  • UBS bought the rights to utilize big data and analytics driven Sqreem (Sequential Quantum Reduction and Extraction Mode) in 2014. The big bank has been utilizing the data-mining machine to stay competitive in an ever-changing financial landscape.
  • Shinhan, a Japanese credit and banking institution, turned its attention to data in 2014 and came up with brand new credit products that have been wildly successful. Instead of offering a generic credit card, they now use big data to determine what kinds of perks should go to which customers.

Benefits in leveraging Big Data Scoring:

A business that correctly leverages big data boasts a staff of engaged, sophisticated thinkers. Big data fundamentally changes how staff and computer systems interact. Advisors are focused on interpreting data, strengthening their ability to diagnose the borrowers’ reliability.

Credit Scoring: Undoubtedly, one of the major sectors that has seen unprecedented new solutions leveraging big data is lending and credit scoring. These new sources go beyond the available quantitative data from banks and assess qualitative concepts like – behavior, willingness, ability, etc.

Customer Acquisition: The cost of acquisition drops drastically for customer acquisition when we compare the physical to digital channels providing huge benefits to both financial services firms as well as startups. Leveraging big data, financial services are moving to digital channels to acquire customers.

Marketing, Customer Retention, and Loyalty Programs:  Analytic solutions that combine historic transactional data coupled with external information sources increase the overall conversion rate. Many financial services firms partner/acquire/invest in startups and growth-stage companies, and are actively pursuing these services. Firms are effectively leveraging these solutions to increase the cross-sell and upsell opportunities, understanding customer requirements and providing customized packaging. Card-linked offers, customized reward solutions are some of the offerings that are being provided by FinTech firms.

The data collection, processing and machine learning steps that result in better credit decisions for consumers and banks. The solutions are easily integrated to any platform and translate directly into more issued loans and better credit quality for lenders around the world and help unbanked consumers get access to financial products that aren’t available without the use of big data.

The world needs to be excited about the concept of big data and advanced analytics  as it is not just because the data are big but because the potential for impact is big. If you want to create a big impact contact Anglo African on 2331636 or via email, we will be please to assist you.

Pin It

Comments (0)
» Blog, Uncategorized » Big Data Scoring a cutting...
On August 2, 2016

Leave a Reply

Your email address will not be published. Required fields are marked *

« »