The financial services industry is evolving and with the shifts in technology, global events, and regulation, this sector is facing critical challenges. These issues include failure to engage with customers, the element of cyber risk, operational risk, reputational risk, regulatory pressures, and credit and investment risk. From the largest multinational financial firms to the smallest community institutions, it is high time for all to revisit their plans because what has led to success until now may not work in the future. Every big and small financial institution have to realize the potential and utilize their data optimally to extract information necessary for valuable business outcomes.
Finance and banking business functions deal with data inherently and therefore, leveraging data analytics in finance has become the sole key to drive success in the competitive marketplace. Applying data analytics in finance opens up new and interesting avenues that offer in-depth insights into the market landscape, the business scenario, their performance, and growth opportunities. In recent years, the ability of data analytics to cope with several principal financial risks has become extremely important.
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At Quantzig, we understand the change that financial services companies can realize by leveraging data analytics in finance. And to help companies reshape their business strategies and improve customer experience, our team of experts have discussed in detail about the importance of data analytics in finance and how it can help businesses improve their decision-making and achieve the goals faster.
Why Financial Analytics is Important?
Data analytics in finance can help financial companies to segregate customers according to their age, gender, behaviour, and interest. This can not only help them in analyzing the spending pattern of an individual customer but also in offering better services to them. Today, data analytics in finance is bringing about a storm of new opportunities and transformation that empower companies to identify valuable customers and provide the best financial offers to them to make them feel more valuable. Consequently, this can lead to increased customer satisfaction and will also help companies understand the channel usage, spending patterns of the customers, and consequently cross-selling of various products.
This is one of the biggest problems that the banking and finance industry has been facing. Increase in online transactions has resulted in increased incidents of fraud. But by leveraging financial analytics, such incidents can be dealt with effectively. By using data analytics in finance, companies can understand and analyze the spending pattern of customers and their financial history. As a result, security on every unusual transaction can be increased and can help to mitigate any fraudulent activity before it grows bigger.
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Offering Personalized Services or Products
Personalized products and services have become the first preference of customers across industries. Through personalized services, companies can offer product and services to customers according to their interest and demand. Companies in the financial services sector can also benefit from this by leveraging financial analytics solutions. Data analytics in finance can help companies to analyze the interest, buying habit, and requirements of individual customers through sentiment analysis. Consequently, this can help them retain the present customer and attract the new one.
Risk management is a crucial factor in every industry, risk in the financial services sector can come in any form like a failed investment, an unrecoverable loan, and fraudulent activities. Data analytics in finance can help companies in this sector in the early detection of risk by analyzing financial data in real-time. Furthermore, this can help in demonstrating increased levels of transparency of underlying assets and risk exposure. Also, by using data analytics in finance, companies can enhance visibility, gain better insights into financial data which is important to prevent risks, improve efficiency, and growth.
Addressing compliance requirements
Financial services companies need to do the regular audit, compliance and maintain certain regulations for their privacy and security measures. Companies in the banking and finance sector can use data analytics to serve customers more effectively. Financial services analytics to synchronize with the big data system and can offer actionable insights into the financial data. Also, data analytics in finance can help in analyzing the data and identifying the situation where security issues or financial crisis may occur.
Customer Acquisition and Retention
Financial analytics can help in the process of optimized targeting, making it easier for financial services companies to identify high-value customer segments who are most likely to respond to their services. This can, further, help in expanding the customer base by acquiring the right type of customer. The recent research report shows that companies that have used data analytics in finance had a significant increase in customer acquisition over a year. Customer retention is also an area where companies in the financial services sector need to focus on in order to reduce customer churn rate. Data analytics in finance can help in identifying customers who are willing to switch to any other financial institution and the reason for driving their decisions. Also, data analytics in finance helps in examining spending pattern, activity, past services, and other behavioural patterns of a customer to predict the likelihood of a customer to discontinue services anytime in the near future. With data analytics in finance, companies in the financial services sector are now able to use sophisticated data analytics platforms to glean useful insights that can help in concocting effective strategies to acquire and retain customers.
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Quantzig’s Financial Analytics Solutions
The recent convergence of data with technology has opened up new avenues for analyzing future financial scenarios. With the increasing volatility of financial services, the need for transparent and safe business processes has increased across organizations. Consequently, many organizations are looking for innovative analytics solutions that can ensure complete safety across processes and transactions, help them make smarter, quicker, and data-driven decisions.
Quantzig’s portfolio of solutions helps companies in uncovering opportunities for cost structure, understanding financial trends across key growth segments, and working capital improvement. Also, Quantzig’s financial analytics solutions offer a real-time view of the organization’s performance and factors that drive revenues, costs, and financial growth. We also offer financial risk monitoring and management solutions that help in reducing exposure to risks, fraud, and credit losses by the timely identification of all financial risks. By leveraging data analytics in finance companies get to manage risks more effectively, which, in turn, helps them maximize ROI and reduce regulatory compliance costs.