BLOGS

The Impact of Big Data on the

Finance Industry

One of the most natural connections one can make with Big Data is the finance industry. The finance industry has been using data for decades now but with the evolving landscape of how things work with technology, the use and application of this data have changed.

So what is the connection between Big Data and finance? How does the former impact the latter? Those are some interesting questions were are going to explore in this article.

What is Big Data?

There are billions of bytes of data being generated as you read this article. Big Data is the collection of this data that is growing constantly and exponentially. And it’s not just that. It is a way to extract knowledge from this complex heap of structured and unstructured data, deriving actionable insights through analysis that cannot be otherwise performed by traditional data processing tools.

Big Data & Finance: Understanding the Impact

Here’s how Big Data impacts the world of finance:

1. Better Efficiency:

The dynamic financial industry is dealing with regulatory compliances, customer needs, and increasing competition. To emerge on top of all of these challenges, they need to boost the efficiency of their organization. This is where Big Data helps to gain a competitive advantage.

2. Personalization:

Financial institutions are less business-centric and more customer-centric now. To be successful and appeal to their customers, they first need to understand who their customers are, where they come from, and more through customer segmentation. All of that can be done with Big Data. This allows them to tailor their products and services.


3. Predict, Describe & Prescribe

If you talk about Big Data and finance, you cannot skip talking about algorithmic trading. It is an automated process performed by a computer to execute trades and transactions at high speeds. This is based on data models that ensure efficient, timely, and accurate trading. Using historical and non-financial data like news, social media, etc. through Big Data better algorithmic models can be created. Big Data has already changed how stock markets work around the globe.

4. Fraud & Scam Management:

Using real-time Big Data processing, scam and fraud detection can be improved by analyzing large amounts of customer data. Timely fraud detection can save an organization from massive financial losses.


5. Building Better Financial Models:

Several financial operations like loans, trading, IPO offerings, discounted cash flow, etc. are based on business models. With access to insights through Big Data, the finance industry has been creating robust, data-relative models that are less risk-prone and highly functional.Big Data has transformed not only the finance industry but other industries too like automotive, real estate, etc. You can leverage the benefits of Big Data for your organization too with us.

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