Financial technology has changed the way we operate from day to day. With the number of people and businesses using Fintech growing, comes the ability to utilize Big Data to optimize the technology. But how?
Since the 1990’s we’ve been using the term Big Data to describe all the data collected from our electronic devices. The utilization of this data has helped a multitude of industries, including the financial world. Here’s a list of just 5 ways Big Data can be used to progress financial technology.
- Detecting fraud
- Segmenting consumers
- Personalizing offers
- Managing risk
- Adaptable to regulations
One of the biggest concerns for most consumers and businesses is protecting their money. Fintech allows the better management of financial services, but comes with the risk of online predators. However, Big Data allows for a better understanding of consumer spending habits and therefore allows for a quicker detection of unusual behavior.
In the financial industry, as in most industries, it is important to segment your consumers. Big Data allows for this to be more easily done because it paints a vivid picture of who the consumer is. You have information on age, gender, race, spending habits, as well as a multitude of other factors.
An easier segmentation of consumers leads to personalized offers. Each consumer has their own set of demands from their fintech, and Big Data allows for a better understanding of each demand. Personalized services derived from Big Data result in happier customers and more money.
Nobody wants to make a bad investment. Big Data can’t completely prevent all bad decisions, but it can help mitigate your chances of going down a risky path. By being able to identify risky investments at early stages and understand risky payers habits, Big Data mitigates your chances of losing money.
Adaptable to Regulations
Regulations in the financial industry are strict. Keeping up with consumer expectations and demands is challenging. Big Data allows for a more adaptable approach that detects changing consumer preferences and future risks. This way a company can adjust their tactics to comply with changing regulations and mitigate future losses.
Utilizing Big Data
Fintech is constantly evolving to meet consumer and businesses’ needs. Big Data plays a key role in this evolution as we continue to find new ways to optimize and utilize it. A better, more personalized service is always being pursued with the help of Big Data.