How Can Big Data Mitigate Modern Business Risks?
Data Analytics and Big Data have made vital contributions to a business’s risk management needs. Big Data can highlight patterns and trends that otherwise would have gone unnoticed. With this information, companies can create inquiries and questions about how it is performing in the market. It can make the desired changes to boost customer satisfaction and its performance in the market.
Companies can also stay safe with Big Data
Given below are the following ways via which businesses can stay safe with Big Data-
Big Data reduces customer defection and identifies churn – With the aid of Big Data, businesses can use the power of Predictive Analysis to get an insight into historical data to detect future churn. For example, American Express deploys historical transactions and one hundred and fifteen variables to forecast their potential churn. It believes it can now detect about 24% of customer accounts (in their Australian Market) that are likely to close within the next few months.
Again, T-Mobile has embraced data integration tools across its IT environments to bring together data interactions and customer transactions for predicting customer fluctuations. They have claimed to have reduced their customer detections by 50% in one quarter by leveraging data from transactions from their billing and CRM systems and Big Data on the use of social media.
Detects potential fraud – Experienced DBAs in the field of data administration and management state big data can identify potential frauds that could take several hours of human resources and multiple interviews to detect its likely source. For instance, American International Group deploys both unstructured and structured data from databases that specialize in claims and adjuster notes written by hand to detect potential frauds. They use visualizations and charts to provide their teams with accurate insights and embrace machine learning for boosting improvements.
The esteemed national accounting cum audit firm BDO deploys Big Data analytics to detect frauds and risks during audits. Due to Big Data analytics, this process to find out discrepancies is better filtered and streamlined. The Company has narrowed down several vendors to review information for signs of inconsistencies, making it simple for the firm to detect a particular source.
Likewise, the IRS has been able to retrieve over $2 million in taxes and curbed several billion dollars to become involved in frauds associated, especially with identity theft cases. With Big Data’s help, the IRS today can curb frauds, detect thefts, improper payments, and ensure compliance with taxation rules and laws in the nation.
Reduce the attrition rates of employees – Experts from the esteemed company in the field of database administration and management, RemoteDBA, say that companies in the USA like Kelly Services, AT & T, and Xerox have reduced their employee’s attrition rates with the help of professional services that help them execute improved hiring and management choices with the help of predictive analytics to over 500 million points of data like the use of social media, the rates of unemployment and more for forecasting employee churn.
Adaption to changes – A good company reacts positively to change and can adjust its plans as per the market conditions, thereby reducing risks in the process. Esteemed FMCG Company, Procter and Gamble, had in the past integrated multiple volumes of both unstructured and structured data across their R&D supply chain. During these operations, they faced customers and interactions with them with both online and traditional data sources. Equipped with this data, they can evaluate business programs and their success rates, helping them react rapidly to the dynamic market conditions.
Reduce risks for new startups and businesses – Big Data helps predict whether a new business set up in a specific location or for a targeted group is viable or not for the future. For instance, Starbucks, the famous coffee house chain, deploys Big Data to determine whether a branch set up in a specific location, will be successful or not. This choice is based on data like area demographics, location traffic, and customer behavior. This assessment helps the Company successfully estimate its success rates and select locations based on its propensity for revenue growth.
Financial risks – Evaluation of financial risks across the company and the industry is important for businesses to get risk free services financially, boost customer satisfaction, and determine whether it is ideal for the business’s continuity. Depósito Central de Valores S.A. or (DCV), a financial firm in Chile, incorporated risk analytics derived from IBM for its data to track present and future risks across its operations. It was able to supervise the inherent, concrete, and residual risks located in the company. With the help of predictive modeling, this company can prepare for future incidents that pose a threat to the continuity of their business and evaluate risks for its business applications.
To boost risk management financially, Morgan Stanley introduced a program on Big Data to improve the analysis of the size of its portfolio and its results with the help of pattern recognition. These are some successful ventures that helped many companies to attain their business goals. They witnessed success in many aspects.
Again, UOB Bank in Singapore has introduced a picture using a system for risk management with Big Data to streamline calculations about the bank’s total risks. This system has effectively reduced the time taken to calculate this risk to just some minutes to 18 hours that it took earlier for the task.
Big Data helps every business detect trends and patterns; however, the companies should have a robust data management plan devised to manage disruptive events in real-time. Experienced and credible DBAs unanimously agree that one of the most regularly used Big Data applications is predictive models for curbing fraud, monitoring, and analyzing the user’s behavior for the effective management of risks. Big Data helps a business gain insight into the future and is today viewed as an effective way to mitigate risks for the business to serve its customers better.