How Fintech Business is Being Transformed by Data Analytics

Did you know that in the last two years, 90% of the world's data was created? Businesses now have unprecedented access to unthinkable volumes of client data as the little computers in our pockets become a vital part of our daily life. Businesses of all shapes and sizes are discovering the power of data, whether it's leveraging internet cookies to create tailored online experiences or analyzing financial activities to provide budgeting advice. Fintechs, in particular, are looking into new ways to use big data to disrupt existing financial institutions with a customer-centric approach. So, what is data analytics solutions in finance, and how can your company personalize consumer experiences? Prepare to be wowed as we investigate the power of big data fintech firms and offer guidance on how to create customer-focused marketing campaigns.

What Makes Big Data So Important?

The idea of collecting data in order to improve customer experiences isn't new. From small-town greengrocers to big-city bankers, morsels of data have always been used to build a better image of their consumers. The BIG in 'big data,' on the other hand, supplies firms with a treasure trove of customer information that has the potential to turn the financial world on its head.

The three Vs can be used to define 'big data':

Volume: By the end of 2022, the entire digital universe is predicted to have grown to 44 zettabytes (21 zeros). To extract relevant insights about individual customers, sophisticated algorithms can process, analyze, and filter massive data volumes.

Variety: Excel spreadsheets and hard drive photographs are no longer the only ways to save data. Big data gathers data from a variety of sources, including video, audio, internet activity, GPS data, sensors, text messages, and more. Structured data is well-organized and follows a predetermined format, whereas unstructured data requires some sorting and processing.

Velocity: Businesses can obtain real-time data because to the "always on" attitude and the rising interconnection of the digital realm. Advanced analysis systems can collect, process, and act on data in the blink of an eye, rather than having it sit around collecting dust.

What Is the Importance of Big Data for Fintechs?

Emerging fintechs are using data analytics services to predict client behavior and build sophisticated risk evaluations, setting them apart from traditional financial institutions.

Disruptive fintechs and challenger banks can respond to a changing market thanks to the speed of real-time data. They can flip to aggressive measures at any time, leaving the large banks scurrying to keep up. Big banks are like strong diesel-powered tanks, whereas data-driven fintechs are like electric scooters that can hop over potholes and take sharp turns. Fintechs can make better decisions and provide more personalized client experiences thanks to their capacity to process massive data sets.

What Role Does Big Data Play in Fintech?

For new fintechs, there are four major advantages to using big data analysis:

• Customer-centricity: Fintechs may leverage big data to generate thorough user profiles and precise consumer segmentation strategies, allowing them to adapt their services to their specific demands. Individualized services can be provided using sophisticated modelling approaches that take into account an individual's risk perception, age, gender, money, location, and even relationship status.

• Security has been enhanced: While fraud is a widespread worry in the digital banking industry, big data can assist fintechs in developing reliable fraud detection systems by detecting any anomalous transactions. Fintechs can also use digital apps to keep clients informed about security issues and protect their money.

• Improved Risk Assessments: Fintech organizations that specialize in data analytics solutions can aggregate data from a variety of sources to ensure that no stone is left unturned. Because of improved risk assessments, fintechs may operate with more financial certainty, manage cash flow, and offer clients competitive rates. As a result of predictive analytics, the way banks think about risk is changing..

• Forget about dialing numbers and waiting hours to speak with an account manager when it comes to customer support. Fintechs can use big data to generate a digital trail of a customer's financial behavior, spot potential mistakes, and give consistent support. Fintechs can also use data and predictions to offer the proper services/products depending on their customers' particular spending habits.

How Cloud Computing Aids Big Data Analysis

While a company's processing power was once constrained by the speed and capacity of its physical computers, developments in cloud computing are accelerating the creation and practicality of big data initiatives. Not only can processing data on remote servers improve the quantity of data a company can handle, but it also helps clients gain confidence in the security of their financial information. Fintechs can scale and navigate public worries about placing their hard-earned money with a less established financial institution thanks to improved encryption technologies on the cloud. However, when it comes to the security and integrity of their data storage systems, many fintechs have a long way to go. Monzo, a challenger bank, made news in August 2019 when a potentially catastrophic internal data leak exposed the security of over 480,000 customer accounts. While the London-based fintech survives, fintechs must prioritize data security in order to gain loyalty and trust.

Conclusion

The use of big data in internet marketing could provide your business with the boost it needs to stand out. Data analytics services not only allows organizations to provide personalized customer experiences, but it also allows them to produce customized marketing messages that resonate with the right people. Instead of basing your marketing approach on ad hoc consumer profiles, having access to big data and real-time insights ensures that you always strike the mark.