Finance has always been about numbers and data. Even before the term data analytics was coined, finance was leveraging it.
- Financial statements are still based on the numbers.
- So are the profit and loss account and income statement.
- Cash flow is full of data left and right, ranging from financing to investing activities.
For years, companies have been using past financial statements to project future growth.
So what’s new about financial data analytics?
The only distinction that can be witnessed is in the curriculum of all regular and online finance certification courses, which have created a separate section for financial analytics. And also the way various industries are using data analytics to manage their financial spendings.
So let’s understand how financial analytics helps manage risks and learn some other interesting applications of this concept.
Also Read : What is the Importance of Finance
How Does it Help in Risk Analytics?
Risk management and analytics is one of the key areas of data analytics and business intelligence in finance. With risk analytics and management, companies can make strategic decisions and increase their trustworthiness in the market among stakeholders, potential investors, and other data users.
Furthermore, risk management measures the frequency of loss and multiplies it with a gravity of damage. And data is the core centre of all this information and working. Risk management is a cross-disciplinary discipline, so knowledge in statistics, friendship with numbers, and great problem-solving techniques are a must. Without this, no financial risk management activity can take place. This is where online finance certification courses come into play. These courses can help you understand the latest trends in the financial world, enabling you to stay ahead of the curve.
Moving on…
Up until the introduction of financial analytics, the world had only listened to the tales of traditional and unstructured data that could be accommodated in spreadsheets. However, since then, the financial world has undergone tremendous transformation and has gained access to advanced and structured data. This access to credible data has allowed organisations to identify, monitor, prioritise, and manage financial risks.
There is a considerable amount of customer information and financial transaction data available today. Therefore, organisations can train their systems to increase risk scoring models and optimise their costs.
Another important aspect of financial analytics is that it helps verify the creditworthiness of customers. Companies employ data analysts who have prowess in financial analytics to analyse transactions made by customers.
For a better understanding of financial analytics in risk management, consider enrolling for a credible online course. One such accredited program you can rely on is the financial analytics program XLRI. Boasting of an extensive and practical curriculum, this course from XLRI aims to provide hands-on experience in popular data analytics techniques that can be implemented in the real finance world.
Meanwhile, take a look at some other practical applications of analytics in the financial domain.
Also Read : What is the Role of Financial Manager
Other Practical Applications of Analytics in the Finance World
- Provides Solid Foundation for Consumer Analytics
That’s right; analytics affects not only just the financial data but also the consumer data. With the help of real-time analytics, financial risk managers and data analysts derive insights from consumer behaviour to make appropriate business decisions.
Financial institutions, banks, and even the insurance companies are leveraging consumer analytics to:-
- Measure customer lifetime value
- Increase cross-sales
- Reduce below zero or NPA for optimising the losses
- Better and Faster Customer Data Management
Financial institutions and banks run on data. As a matter of fact, data analytics and big data have revolutionised the way in which financial institutions function. The volume and variety of data available through customer transactions and social media has allowed these firms to separate and manage customer data more efficiently.
Furthermore, ML algorithms analyse the latest trends in the finance domain and change the market values through a thorough customer data analysis. The financial analytics program XLRI can be tapped into to gain a more comprehensive view of the domain. Ranging from R, Python to NoSQL tools, this course equips you with popular financial analytics tools, skills, and knowledge, enabling you to process and manage customer data effectively.
- Helps Provide Personalised Services
Financial institutions, banking services, investment firms and insurance companies are responsible for providing personalised services to their customers. In order to do that, they employ a variety of techniques to analyse customer information and generate insights about their interactions.
Furthermore, these firms are relying on speech recognition, search queries, digital data, and natural language processing-based software to provide better customer engagement, interactivity, and service to their users.
With the data collated, these firms take actionable insights into their customer needs which helps them provide personalised services, ultimately optimising their strategies and increasing profit.
- Allows Fraud Detection
Fraud is one of the most paramount concern for every bank and financial institution around the world. And the exposure to fraud has increased with an increase in the number of customer transactions. However, with the progressions in big data and financial analytical tools, organisations can now keep track of fraudulent activities.
Various machine learning and data analytical tools can be leveraged to identify unusual patterns and activities in trading data and alert organisations. And this is how financial analytics allows fraud detection.
Also Read : How to start a career in Financial Analytics in India
Over to You…
There are several other practical applications of financial analytics. Knowing each one may not be a walk in the park. But, when it comes to career opportunities in financial analytics, there’s an abundance.
Ranging from financial risk manager to financial analyst and machine learning engineer, there are a lot of opportunities in this domain. However, you need courses that can guarantee you the best job opportunities.
The financial analytics program XLRI is one of the best job‑guaranteed courses in the finance industry. It may not guarantee job placement but increases your chances of landing one significantly.
So what are you waiting for? Scour the internet for credible online finance certification courses or cut your research short, trust the expert recommendation, and enrol for the financial analytics program XLRI offered on the Talentedge platform.
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