Data Science in Banking and fraud detection in data science. It is a field of analytics and data science. Businesses often collect data and do analytics on it in various forms such as financial, marketing or operations. Data scientists are often involved in extracting information from data and collating, summarizing, interpreting or using it for analytical or business purposes.
Today the increasing amount of digital assets has led to a huge increase in transactions carried out via various online portals. Big data has also led to a huge increase in the volume of transactions being carried out by Indian banks. According to a study released by the National Payments Corporation of India (NPCI), banks had processed about $19.7 billion worth of card transactions through the Unified Payments Interface (UPI) by October 2014, a jump of 28.6% over the previous year. The banks saw a bigger jump of about 33.1% in the number of transactions paid by card compared to merchants.
“Banks have significantly increased the amount they can hold on to in order to hedge against volatility in any direction. These trends have led to a lot of volatility in the rates. The year-on-year change in currency rates by Nordea Bank has been a case in point,” said S.C. Bajaj, a senior manager at UPI vendor Decentral.com, who is currently associated with Decentral’s UPI business. Nordea Bank has seen the largest dollar volume of UPI transactions through its debit and credit card accounts. A view of the growth over time.
UPI transactions are conducted over the internet from smartphones and tablets. Credit card transactions on the other hand can be accessed over the card terminals at POS.
In order to enable fraud detection and prevention, banks have turned to massive data harvesting. The demand for small transactions has also increased, with payments increasing at an annual average rate of around 12%. While digital payments, digital card and UPI will be a boon for banks, they are still on the lookout for new growth. “What banks have is customer data. As the market in India grows, people will pay for services via credit cards as well. So fraud detection and prevention will be one of the key things in the future. Most of the solutions today, like fraud detection and prevention solutions are based on AI, Machine Learning and other technology of data mining.
In the future, we will need to put in place digital identity solutions. However, our approach is not yet 100%. We do not have one single solution that will completely prevent fraud from happening,” said Ashutosh Bansal, CIO of UPI vendor Endesh. In the age of digital payments, the need for effective solutions is greater than ever. That is why more and more banks are investing in data science. It is a field of analytic and data science. Businesses often collect data and do analytics on it in various forms such as financial, marketing
Bankers currently spend tens of millions of dollars annually on data mining, as they seek insights to bolster their loan appraisal systems or identify patterns or anomalies in their existing data, which can influence interest rates, loan approvals, or the estimated payments of credit cards.
The impact of data mining on the industry is expected to be substantial in the years ahead. By next year, $9 billion in new loans and $20 billion in new mortgages will be made annually. Such trends call for proper data science training to ensure the data is robust and can be deployed with accuracy in day-to-day operations. Data Science can help lenders to expand their ability to mitigate risk and avoid risky product issuance.
What are the key elements of data science?
The processes that drive the industry are also changing. Increasingly, in a data driven financial system, financial institutions can better analyse and understand the impact of an investment on a person’s lifetime income. Understanding customer, partner, and member preferences can help improve retention, predictability, and speed up renewal of consumer accounts. Globalisation and personalization are emerging trends which will impact the banking industry further in the coming years.
Data science helps banks develop and maintain better relationships with their customers, such as by:
- Unravelling the journey which customers take to finance a home;
- Reaching out to people who are eligible to finance their home;
- Creating a great service experience with competitive pricing;
- Promoting its most valued products (lenders);
Providing data-driven products and solutions for businesses, as well as to its customers.
What different roles do data science professionals play in the banking industry?
The data science practice helps to extract and analyse data in various ways. Analysts are responsible for extracting relevant and timely data for analysis and improving the effectiveness of an organisation’s operational processes. Researchers are building knowledge of what it is like to work at a bank and learning how to extract the data necessary to advance the organisation’s competitive edge. Data scientists are using cutting-edge algorithms to explore the hidden patterns within large data sets to uncover the right information and create useful information to inform the performance of operations.
Can a data scientist handle many roles within the banking industry?
It depends on the needs of a company. A well equipped data scientist may learn different programming languages or frameworks (such as Python, Matlab, and R), open source software, database management systems, and machine learning and computer vision algorithms. A data science professional can work in the financial management department, as well as the operational aspect of an organisation, as part of a technical staff. Working with the client can be important to engage with customers and understand their needs. It could be helpful to understand the customer’s business process and try to understand their own.
Is it easy to become a data scientist? Yes. The financial industry is a high-growth industry with an emphasis on strategic investment. It requires highly motivated, committed and talented employees. I’ve interviewed many data scientists and if I had to say one thing about data scientists, it would be, “There is no job that can’t be done by data scientists.” Is data science a career for the faint of heart? Yes. The industry is highly competitive and requires a level of capability beyond most other fields. The skill set is highly specialized and leads to extensive experience in data analysis and understanding of the underlying