Everything connected with technology involves data. Financial services in combination with technological advancements have completely changed the way they operate — while the first thought when hearing words ‘technology’ and ‘banking’ in one sentence is still related to online payments, transactions, internet banking, and apps, in reality, it goes far beyond that. The evolution comes from the amount of data produced by our electronic devices. Since more and more people switch digital banking, data becomes bigger and bigger, acquiring an evident name — Big Data.
What is Big Data?
Big Data is all of the data and information that comes from users’ phones, tablets, laptops, PC and other electronic devices. However, in a raw form, this data has no value. This is where data analytics come into play, and in FinTech, the information extracted from the Big Data can be used to foresee customer actions and preferences, create bank policies and develop strategies for growth. So how exactly can it be used in FinTech?
Personalized Services
The best way to attract and keep customers is to offer them personalized services. FinTech, in collaboration with quality Big Data analysis, is the most effective platform to provide unique personalized solutions. The growing industry creates a lot of competition, and even traditional banks are now addressing FinTech platforms in order to make their services more appealing to the modern customer base. In addition, many’s FinTechs goal is to actually save their customer’s money, which of course increases the interest and demand for these solutions.
Compliance with Regulations
When working in the financial industry, there are some rules that have to be followed. There are regulations that require compliance in terms of security, finances, data and user privacy. Big Data provides FinTechs with valuable information regarding customer insights and their future preferences. The data that can predict future demands and potential risks make a financial organization more effective and adaptable to regulations.
Fighting the Fraud
With the increasing popularity of online banking and digital transactions, the chances of fraud rise alongside. Big Data provides wider prospects for fraud detection. The data of each customer provided can help financial services record their behavior patterns, so when the unusual activity is detected, the user can be contacted for confirmation.
Things to Consider: Ethics
When working with people’s personal data, it is necessary to remain ethical. Due to this area being relevantly new, regulations in terms of ethical considerations can be a little bit behind the emergence of new solutions based on Big Data analysis. This is where it is important to offer users a choice — whether they want to provide their personal information in order to get better service or not. Additionally, ethics should always be in the team’s values — using data only for better intentions, putting it at the core of the work FinTechs do.
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