6 Ways Big Data helps Companies Mitigate Risks

What can the data-loving marketer of today learn from brands like American Express, BDO and Xerox when it comes to data and risk prevention?

Gathering extremely large sets of digital data from social media, web-browsing trails, surveillance and sensor systems, transactions and online orders to illuminate trends and patterns is not uncommon.

Big-Data and Data Analytics have made a significant contribution to serve the risk management requirements of organizations.

Here are 6 ways data can help companies stay safe!

1.       Identifying Churn and Reducing Customer Defection

Big Data has the ability to illuminate trends and patterns that would have otherwise been invisible, which then creates questions and inquiries into how the business works. Ultimately, the outcome of such pattern identification is often the ability to predict when a certain business-contextual event is about to happen, and then to adjust accordingly in an automated fashion. - Daniel Miessler, Specialist, Creative problem-solving.

2.       Identifying Potential Fraud

3.       Reduce Employee Attrition

4.       Adapt to change

5.       Reduce risk for new business

6.       Financial Risk Management

Big Data allows organizations to rapidly bring together multiple data types across silos of data sources to better analyze things like credit risk, market risk, operational risk, compliance risk and asset liability risk. - Raj Kushwaha, CTO, Warburg Pincus

Depósito Central de Valores S.A. (DCV) a Chilean financial firm implemented risk analytics from IBM to its data to pinpoint current and future risks across its business. DCV was able to monitor inherent, residual and concrete risks within the company. Using predictive modeling the company can now prepare for future incidents that threaten business continuity and assess risk for all its applications.

To improve financial risk management, Morgan Stanley, launched a Big Data program to enhance analysis of its portfolio’s size and results using pattern recognition.

Singapore’s UOB bank too brought into picture a risk management system that uses Big Data to streamline the calculation of the total bank risk, reducing calculation time to a few minutes as compared to the earlier 18 hours.

Kreditech, a German company uses Big Data (location data, social media analysis, online purchasing power, and web analysis) for risk management. Using this data, they credit-score individuals to predict individuals that are likely to default.

Kabbage, an American loan company also analyzes the risk of pre-financing and lending working capital to corporate customers. They grant loans based on external data that stems from social media, sales platforms like Amazon and online delivery services.

Paymint is using Big Data to recognize fraud patterns to combat credit card fraud. Their software analyzes several million transactions on a monthly basis to manage risk.

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