Advancing beyond analytics
In today's world, knowledge is power, and anyone who can harness this power is going to have an edge over the others in every single way. This knowledge comes from information, which in-turn is processed data. Today, we have several means to collect or gather data, but how well we can use that data depends on how well we analyze it. Over time the data collection, as well as the approaches to analytics have evolved.
The orthodox approaches (such as query and reporting) of business intelligence (BI) were found to be lacking in coming up with insights required for the present day industry. Thus, an alternative was found in sophisticated quantitative methods such as statistics, descriptive and predictive data mining, simulations, and optimization. This new approach to analytics was an advancement over the traditional methods, in the form of organization, coherence, effectiveness, and accuracy in the insights. Thus, the field of advanced analytics was born - as with all other things - out of the necessity to achieve perfection beyond the current methods.
Organizations are attracted towards advanced analytics as it helps them gain insights and improve decision making. Along with this, it also helps them to detect frauds, optimize the next best offer for customers, and in maintenance activities using predictive methods.
In the financial industry, there are multiple examples of the use of advanced analytics. Case in point - the Nordic Danske Bank relies on advanced analytics from Dell Statistica to be able to provide quick and accurate services to its customers, 24/7. In a highly competitive industry like banking, customers are not happy to be served with just traditional "bankers' hours" of 10 a.m. to 3 p.m. They want to be pampered with not only 24/7/365 access to their accounts, but also services such as transactions, loans and alerts. To provide such services, the financial industry was forced to use a variety of analytical models; and it is this increasing adoption of analytics that gave the advancement of analytics a push.
Consider the following fact to gauge the momentum of the advancement of analytics - over 72% of analytics initiatives which have been announced by banks over the last couple of years have been for advanced analytics.
Before we get too gung ho about the above figure, we must remind ourselves that so far, the major focus of advanced analytics has been only on descriptive capabilities. However, portfolios of analytics capabilities of all sectors, such as banking, are slowly-but-surely being extended to predictive and prescriptive analytics, from just descriptive analytics.
What does this hold for solution providers? A reputed research firm says that advanced analytics is a top business priority. This is further confirmed when we consider the fact that within BI, advanced analytics is the fastest growing segment, and has surpassed $1 billion in 2013 itself. Financial services have been at the forefront of this growth and are likely to remain so for at least next 5 years. Banks have been using predictive analytics and cognitive computing - which are types of advanced analytics - to discern unsavory transactions before they can have any impact on the banks and their customers.
A cursory glance at history would tell us that the advancement of technology is not a steady curve. There are plateaus, upward spurs, and sometimes reversals as well. Let us wait and watch how things move in this particular space.