The financial sector has become one of the biggest consumers of big data in recent years. Big data is changing the industry in unprecedented ways. Experts say, 75% of financial service companiesused big data in 2018. Why is it so popular? We’ll tell you in this article.
Allow make better actuarial decisions
BigData makes highly consolidated industry much more competitive. This is possible because of analitics, which allow to make business right decisions. In fact, it is their entire competitive edge in an increasingly crowded market.
Big Data Analitics
Big Data analytics platforms enable institutions to develop predictive models that increase the chances of getting better returns, giving them an edge against banks while allowing them to maintain a less administrative process and provide the quick decisions borrowers come to expect in the online environment.
Using predictive analytics allows brands to set more accurate borrowing terms, which is financially beneficial to customers with low risk profiles. It also reduces the risk of taking on unnecessarily risky borrowers without setting appropriate terms.
Providing Better Value for Customers
Companies in all verticals are using big data to offer better customer service. The P2P lending industry is no exception.
Many customers expressed concern about companies having access to their data. However, these companies often use the data to better serve them. Accenture reports that customers have stated that they are willing to give financial institutions access to their data if it leads to better service, especially while they are seeking a mortgage or other loan.
Proof for investors
Big data gives small lenders an opportunity to showcase their edge to investors. It has helped brands secure funding for working capital that wouldn’t otherwise be available to them. Just make all of your data publicly available. That will show, you have nothing to hide, investors can understand the returns, they can understand the risks, and it even forces you to hold yourself to a higher standard because you know everyone can see your data.
Consistent compliance of standards
Regulators around the world have adopted stricter standards in the aftermath of the financial crisis. Big data helps brands conduct better internal audits, which reduces the risk that they will get penalized from financial regulators.
Improving the auditing process
As we continue to operate in one of the toughest and most uneven economic climates in modern times, the relevance of the role of auditors in the financial markets is more important than ever before. It’s a massive leap to go from traditional audit approaches to one that fully integrates big data and analytics in a seamless manner.
Big Data is Shaking Up the Fintech Industry
Big data is changing the financial industry in numerous ways. Small lenders are able to deliver better support and have an easier time securing loans than ever before. This is making the industry more competitive, which should help keep rates low.