Need of Data Analytics in the Finance Domain

September 5, 2020 | Kalyani Mazumdar | Finance
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Need of Data Analytics in the Finance Domain

With the passing days, the role of data analytics within the finance industry has made an immense growth. Professionals these days are using the knowledge of data science, machine learning at the workplace to manage the organisational risk factors and increase the efficiency of the decision based on facts.

In this blog, we will explore how data science is reinventing Finance. Ever since its emergence, Data science has helped to transform many industries. For decades, Financial professionals have been using data to extract valuable insights but with an advancement of data science, it has brought a new era in the Finance field. Automated algorithms and analytical tools are being hand in hand in the industries.

Understanding the term Data Analytics

Data analytics is all about using financial and non-financial data to help companies make better decisions. It is a process of collecting, transforming and modelling data in order to generate useful information.

Role of Data Analytics in Finance

Finance was always using data science even before the term data science was derived. Financial institutions are considered to be the first users of data analytics. Data analytics is used in finance industry in the following areas:

· Risk prediction: Data analytics act as a warning tool that helps companies to identify their risk cost and fraudulent cases. Companies are recruiting data scientists these days that are able to use machine learning tools to analyse transactions made by the companies.

· Managing customer data: With the proper usage of data analytical tools, financial institutions like banks are able to provide accurate information to their customers on time. Structured data help banks to operate efficiently on day to day activities. Financial transactions are operated smoothly with proper surveillance to avoid any fraudulent activities.

· Fraud prediction: For any financial institutions, fraud is a major concern. With growing transactions these days, fraudulence has also increased. With the help of data analytical tools, financial institutions are now being able to monitor the risks of fraud. One of the most common fraud activities is credit card fraud. The detection of such fraud activity is possible for the improvement in the algorithm’s tools.

· Personalized Productivity: With the advancement in technology, customers these days have developed an expectation of personalized services. In order to manage this service efficiently, data analytics techniques play a vital role in analyzing the customer services and interaction on different social platforms. Artificial intelligence is able to understand human emotions and interaction and are successfully transforming these activities into useful data for a company to use.

Financial institutions have widely adopted data analytics to provide better investment decisions with consistent returns. It allows companies to effectively identify risk and ensures customer security.

Manually written ledgers are now being replaced by programming languages like SQL, Python. The impact of data analytics will keep growing as financial professionals have identified its benefits and will thrive using these tools to increase the opportunities and financial rewards for the organisations.

Data Analytics Career in Finance

Data analytics professionals serve almost all industries. Financial companies rely on the analyst to provide accurate information on – budgeting, financial reporting, managing the risk activities and improving the investment opportunities. Companies are hiring professionals having sound mathematical knowledge with problem solving ability skills.

A combination of technical and soft skills knowledge allows a data analyst to process, interpret, and analyse data to solve a problem-solving and provide effective decision-making to its organisation.For more details please email us to info@upliftprofessionals.in

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