Harness big data potential to leverage the financial sector

December 1, 2016

The power of Big Data is advancing swiftly. Likewise, technologies, applications, and opinions based on Big Data are quickly changing. Big Data may be framed as the Next Big Thing; the key to all future innovation or simply a hollow branding term. But between these extremes, Big Data is a vital area of focus for consumer finance because it has potential to support consumer financial health efficiently and at scale. Nowhere is this phenomenon more relevant than in financial services. The finance and insurance industries have the strongest ability to both “use and obtain value from” Big Data.

About big data scoring

Big Data can be understood as the collection and use of large data sets that can be broadly combined and distributed to identify patterns and create new data based on these insights—known as metavariables— to increase the effectiveness and efficiency of consumer finance products.

As a greater share of modern life is encoded into data streams, Big Data tools can enhance the capabilities of a wide range of financial service companies through machine-learning algorithms that get smarter over time, building stronger predictive models as they gather customers and data points.

Not all consumers—underserved or otherwise—will benefit from the use of new types of data, but the flow of data between people and financial services providers presents great opportunity for innovations to meet the needs of many consumers with high-quality financial services.

Big Data Developments with Promise for Financial Services

  • Designing Data Mosaics for Personalised Outcomes The impersonal becomes personal when overlaying data from multiple sources yields precise, tailored consumer profiles. The data sets may be vast, but successful providers can use them to accurately identify individual needs, better know their customers, and help customers better know their own habits and financial patterns. Creating best-fit products that are responsive to the changing circumstances of each consumer increases efficiencies and cost savings for providers and increases access, value, and quality for consumers.
  • Connecting the Dots – Communicating Data Elements Clearly Financial providers can learn a lot from data generated through the daily activities of consumers, but often consumers are not aware they are generating data that impacts analytical models. Some innovative companies are going beyond legally required minimums of disclosure by transparently conveying the types of data sources they use or explaining to consumers how their behaviour can drive profile improvements that lead to better rates and offers. Well-informed consumers who are empowered to report erroneous data or shift behaviours to improve their financial standing can enhance data quality and reduce risk for providers while securing better outcomes for themselves.
  • Opening the Books – Trading Private Information for Better Value Integrating highly reliable personal data leads to lower risk for Big Data-driven providers, but capturing that data often means venturing into private territory. One effective strategy is to invite consumers to opt in and voluntarily share more personal information and financial data in exchange for more attractive offers and lower rates. Products that allow consumers to control the balance of trade-offs between greater privacy and greater value can allow both customers and providers to reap greater benefits.
  • Hitting the Target –Strengthening Models Through Market Adoption Big Data applications become smarter and more efficient as they secure industry partners and access to a richer variety of data sets. But to truly enhance data accuracy and impact end consumers, Big Data companies must not only increase their network footprint, but also scale up their industry adoption rates. Successful companies are finding routes to wide market exposure, often by crafting compelling tools for financial services providers that have a broad market reach and high returns on investment.

The Anglo African team can assist you in unlocking the full potential of FinTech for the prosper of your business. If you have any queries, or if you would like further information, please contact us on 2331636 or by e-mail at contact@infosystems.mu.

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