Anything that is in connection with the technology has involvement with the data. In terms of financial services, they come with collaboration with technology that has changed the way of operating financial work.
Financial experts believe that in the given 21st century, data is pure gold! But one thing they tend to forget: without polishing the raw data, it cannot become precious just like gold!
As FinTech industries are growing at an exploding rate, it has become a headache for them to manage the data. So, for the majority of the FinTech app development companies, it has become essential to remain in touch with their customers through the use of 'Big Data'
What is meant by Big Data?
As per the consensus, 'Big Data' is the collection of technologies and methodologies that are utilized to collect and analyze large and complex data sets (data can be structured, as well as unstructured).
Now, a question arises- ‘From where data arrives?’ The data comes from a wide range of user's devices ranging from smartphones, laptops to PC, and other e-devices. But there is one problem here. The problem is that the data collected here is of raw form that comes with little value.
In such a scenario, data analytics plays a decisive role. Here, the extraction of information via Big Data can assist a FinTech app development company to forecast customer’s actions that can be used to create effective and successful strategies for their growth.
In recent times, the use of Big Data with financial institutions has grown exponentially. The predictive analysis used in financial services with AI to rock the world of FinTech application development.
How Big Data Analytics Produce Impressive FinTech Solution?
If one thinks that simply amassing a large amount of data will bring a good result, then it is the wrong option. Just collecting data will not help any financial enterprise to survive for long. But coupling it with Big Data will help in producing the best result.
It is evident from the given fact that the ultimate goal of data analytics is to offer business insight from the collection of data. Thus it becomes crucial for business users to utilize it efficiently to enhance their growth.
Likewise, a larger role in the succession of FinTech against traditional financial processing is due to Big Data. Here, in the given blog, the user will come to know about how the FinTech sector is leveraging Big Data to enhance their proficiency in offering robust financial services manifold.
- Helps FinTech Companies to secure more Funding
The current economic scenario is not in a good position and is usually cash-strapped which makes funding a case of concern. But with the arrival of Big Data, FinTech firms have got access to a tool that will help them to expand to new areas in a better way.
During expansion, FinTech companies need to secure a significant amount of financial capital. After the financial crisis in 2008, many companies have made it a habit to offer financial assistance to only those companies that comes with an accurate business plan.
However, Big Data analytics have come to rescue small lenders in offering them an opportunity to showcase their skills among their investors in the best possible manner. In this way, many small brands have been able to secure a substantial amount of funds that otherwise will not be available to them.
- Use of Predictive Customer Analysis to Build Next Gen Customers
Recent studies have shown that there has been a significant increase in customer complaints with respect to credit reporting, debt collection, and many other financial issues. Even more, FinTech companies, irrespective of shapes and size, have to deal with a fair share of negative reviews about their financial products from customers online.
Solving each customer's grievances is not as easy as it might look. But with Big Data at the backdrop, companies can leverage the data and offer a new quality level of customer experience with great precision. Furthermore, it will help in developing an algorithm to cater to the raw data and transform it into useful information.
In fact, the predictive matrix takes few factors into the account, such as:
- The behavior of customer that includes transaction, payment and usage history
- Personal data that include demography and other personal information
- Cordial interaction with customers by checking their emails, chat transcripts, and so on
- Checking their sentiments via their needs and online opinions
Further venturing deep into the customer experience, an enterprise can be compelled to think about the entire procedure of product positioning. Though the given fact arises from the negative sentiment, yet it helps in assessing the wants of Gen Next to offer the best possible financial services.
- Offers Power to Fight Online Fraud Strictly
During the current time of the pandemic, the popularity of online banking has reached a new height. However, with its enhanced online presence, there has also been an increase in fraudulent cases. Thus, banks need to provide hi-tech security to their most cherished asset (customer’s ‘trust’) at any cost.
With the utilization of Big Data, a FinTech enterprise can get cutting-edge tools to detect and mitigate online fraud in a quick time. Why so?
The answer is that financial (and banking institutions) get assistance from data analytics that support them in understanding the activity patterns of their customers and protect them from emerging online threats.
Besides, Big Data also offers support for the behavioral authentication through which the given data analytics evaluates the account of the customers. They also check from which device (PC or smartphone) they are handling their account, their username and password, and even their location. Due to it, Big Data will get essential information and help in substantial improvement in fraud detection with its simultaneous removal.
- Assist FinTechs to Take Better & Accurate Decisions
By utilizing the services of Big Data analytics, the FinTech sector has become more competitive so that it has acquired a foothold in the financial industry firmly. Due to it, FinTech companies are not afraid to take on bigger financial banks. How is it happening?
The answer is the power of predictive analytics through Big Data that allows financial brands to take perfect borrowing that is low-risk in factor and more beneficial financially. Moreover, it also helps in taking the decisions to find and flush out unnecessary risk borrowers to maintain the quality of their financial products accurately.
In addition, it creates an environment where business decisions do not look as difficult as one thinks. It is because Big Data clearly forecast the outcome and helps an enterprise to take the necessary decision to prevent any unforeseen event.
- Positive Impact of Big Data in Lending & Credit Scoring
Big Data has scored a big goal in improving credit scoring and lending for the FinTech sector. Traditionally, the calculation of credit scoring was done using a basis of financial transactions done by an individual during its functioning. But with Big Data, many other aspects (such as behavior, ability, and willingness) have also gained prominence.
What’s more, various FinTech website development companies have taken the step to leverage Big Data heavily to get access to more customers via several digital channels. Also, they help in offering great contextual engagements by offering lenient credit scoring to increase the opportunities for FinTech companies to enhance their business fortune.
There has been saying in the business world that- ‘Big Data is the New Fuel to run FinTech Sector.’ The given phrase clearly states that if they value the intention of the customers, they have to watch out for data analysis.
As the FinTech sector is increasingly becoming fiercer, taking the cue for Big Data to bail them out from business rivalry swiftly. Besides, it offers an opportunity for the FinTech sectors to get access to accurate insights to provide better financial services to their customers and win their trust most properly.