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Big data boosts financial services institutes

Financial institutions can reap massive rewards if they efficiently and effectively make use of big data.

So said Filip Vanden Hout, solution specialist for Microsoft SA’s Application Platform, speaking at a breakfast seminar hosted by IT governance body, ISACA, in Sandton yesterday.

Firstly, Vanden Hout said the financial services sector can benefit by using big data in risk modelling. For banks or other financial institutions, he explained, big data provides an effective way of learning more about customers – bringing in data about their spending habits, their

Credit history, repayments, as well as all interactions with the institution.

“This can then be pulled together and modelled to establish the risk they present as a customer,” he noted.

The sector can also make use of big data to implement customer churn analysis, said Vanden Hout. He explained that data from many different sources, including social networks and customer interactions in call centres and on Web sites, can be used to determine how and why a company is losing or gaining customers, and how to influence the process.

Another benefit, he said, is customer-centric product targeting. “By looking at the spending habits of customers, such as locations and frequencies of transactions and combining it with information available from social networks, more detailed information can be inferred about the likes and dislikes of customers,” he said.

According to Vanden Hout, this allows the organisations to tailor products to customer preferences and engender loyalty.

Financial institutes can also derive real-time exposure monitoring by making use of big data, he added. “With big data, the financial services industry can monitor investment banking activities and trades in real-time to track exposures and flag or block risky trades.”

Finally, he pointed out that big data can improve the organisations’ threat analysis and fraud detection.

Vanden Hout explained that Hadoop – an open-source software framework that supports data-intensive distributed applications – can be used to analyse spending habits, earnings, historic transaction patterns and other key metrics to work out if a given transaction or interaction is fraudulent.

Big data can also prove useful in the healthcare industry, he noted, pointing out that the sector can utilise big data for data analysis and reporting; improved research; healthcare logistics planning; pandemic planning; as well as fraud claim detection among other benefits.

Government too, can benefit from big data, especially on issues like transport optimisation, natural events preparedness, intelligence gathering, and economic planning, he said.

As well as being useful in oil and gas exploration. “Oil and gas organisations must synthesise a vast amount of information from equipment sensors, geolocation data, transactions, and production results to improve performance and reduce costs,” he noted, adding, big data can be useful to the industry by improving production with better data analytics; collecting and managing sensor data using tools like Power View to track performance and optimise resources to boost revenue and reduce costs.


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