The amount of data generated by financial services organizations on a day-to-day basis is staggering. Banks are learning that they need to have a better relationship with data and data analytics in order to remain competitive in today’s increasingly digital global economy, and it takes a fair amount of effort to stay up-to-date on the ins and outs of big data.

Banks are in good company as far as big data goes. IT research firm Gartner predicted at the beginning of 2016 that by 2019, 90 percent of organizations would have a chief data officer – someone dedicated to handle the opportunities and responsibilities that arise from collecting and analyzing all of a company’s data. Banks are no exception to the big data rule, and many organizations are finding that their operations can improve immensely once they’ve embraced the power of analytics.

Many banks are adopting big data analytics as part of their core strategies, which in turn is paving the way for better decision-making and helps organizations improve their risk management strategies and remain compliant with industry standards, among other key benefits.

Bank managers can more easily determine risk and make more informed decisions about loan pricing and interest rates.

Risk management made easier

One area where banks are finding big data useful is in the loan origination and pricing process. By drilling down into customer data, bank managers can more easily determine risk and make more informed decisions about loan pricing and interest rates. In a 2014 report, the Economist Intelligence Unit noted that big data can be used by financial services organizations to drive better decision-making and increase the effectiveness of their risk management activities.

“The ability to harness larger and more diverse data pools in support of business decision-makers holds the promise of both reducing losses by managing risks and increasing revenue by highlighting business opportunities,” the report stated. “Successfully managing risks today requires that bankers identify, access and analyze trusted data and share their results across the bank.”

Maintain compliance

Being able to analyze customer data is also good for banks in terms of remaining compliant with industry standards. In such a heavily regulated field, it’s critical for financial services organizations to automatically audit their operations. By investing in big data analytics solutions, banks can make sure they’re filling those small gaps in compliance that are created because of silos within the company, according to ABA Banking Journal Editor-in-Chief Evan Sparks.

“As banks continue to build on the promise of prescriptive analytics, they’re finding applications for these tools in three key areas: growing the bank’s business, gaining operational efficiencies and facilitating regulatory compliance,” Sparks wrote. “For banks that brave the process, the result can be greater efficiencies, stronger product performance and better compliance.”

In other words, organizations are using analytics to improve processes across the board. For more information about how the big data experts at Aunalytics can help you use your data to improve risk management and predict customer behavior, contact us today.