Big Data for Fintech Industry
The financial sector has become one of the biggest big data users in recent years. According to Gartner, 64% of financial companies used big data in 2013. That number has risen steadily over the last five years.
Big data changes this industry in a way that has never been done before.
Big Data and Predictive Analytics For Better Actuarial Decisions
One of big data’s biggest implications is to make the industry that was once highly consolidated become more competitive. The Fintech company is able to compete with a bank that has much larger scale.
The biggest advantage given by big data on Fintech companies is predictive analytics. Lenders can use data to make decisions related to client risk profiles. Utilizing predictive analytics allows brands to establish more accurate loan requirements, benefitting clients with low risk profiles financially. This would also reduce the risk of taking risky borrowers without imposing appropriate conditions.
Providing Better Value for Customers
Companies at every level use big data to give customers a better service. The P2P loan industry is no exception. Many customers expressed concern about data security since the company has access to their personal data data. However, these companies often use the data to serve their customers better. Accenture stated that customers would allow their data to be accessed by financial institutions provided that it could improve the services given, especially if customers were looking for loans.
After the 2008 financial crisis, many financial institutions were hesitant to offer funding assistance needed by startups to develop their work. These new companies need to present a good business plan to get the trust of investors or ventures.
Big data gives small borrowers the opportunity to show their excellence in front of investors by making their data publicly available. With this, investors can understand their investment returns, the risks they face, or even force companies to keep innovating because everyone can see the data it has.
Fintech as a new industry that emerged in the digital era is growing, including in Indonesia. In Indonesia, Fintech is developing in various sectors, starting from startup payments, lending, financial planning, retail investment, crowdfunding, remittances, financial research, and others.
For that, Indonesia has one of the best big data analytics tool in Paques. Paques carries a self-service analytic feature, where everyone with different kind of backgrounds can operate it easily, including the ones that deal directly with the fintech industry. This allows companies to do problem solving and get insight more precisely.
Big Data changed financial industry, including fintech with many ways. Small borrowers were able to get the support they much needed than ever before. This keeps market competitive and holds the rates low.