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While it is a cliche to observe that data is the gold of the 21st century, few have considered the role of processing in this metaphor: raw data must be processed to become precious.
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At the scale of most businesses, the volume of data is too great for humans to handle, so we must turn to data science.
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Nascent big data technologies such as machine learning have already been applied in fintech.
Bassim Haidar, Founder & CEO, of Channel VAS discusses Big Data and the fintech. While it is a cliché to observe that data is the gold of the 21st century, few have considered the role of processing in this metaphor: raw data must be processed to become precious.
At the scale of most businesses, the volume of data is too great for humans to handle, so we must turn to data science.
This is especially true in today’s current situation as more people turn to technology to stay connected and keep their businesses afloat. Big data processing allows companies to complete complex tasks like risk assessment, providing financial access to groups of people who were previously inaccessible.
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Nascent big data technologies such as machine learning have already been applied in fintech.
At Channel VAS, we apply big data processing techniques to our micro- and nano-finance solutions and enable lenders to provide credit to the underbanked at greatly reduced costs.
Such techniques are still in their infancy, but as they continue to advance over the coming decade they will further empower fintech firms to serve new customers, especially in the developing world, and leave an indelible mark on the global financial landscape.
Big data as a key enabler of financial services innovation
Big data has revolutionised value generation for the financial services industry.
Providers constantly strive to innovate and improve their tools, services and offerings to enhance customer loyalty and surpass their competitors.
In this struggle, big data and machine learning are key. They allow fintech companies to complete the typically protracted and expensive tasks of credit risk scoring and assessments faster and more affordably.
The continued evolution of big data
Big data’s utility will grow concurrent with the evolution of the Internet of Things (IoT), progressing mobile technology, and more advanced authentication techniques.
Fintech companies will, therefore, continue to focus on the accumulation and processing of data by actively investing in data science departments.
For instance, at Channel VAS, we rely on big data to develop the proprietary analytic tools and credit scoring algorithms which form the foundation of our business. Such developments have generated new lending possibilities for previously underbanked and underserved audiences.
Overcoming regulatory hurdles
For big data to truly realise its immense potential, however, a drastic shift in the regulatory framework is required. Regulators still seem stuck in an outdated mentality that prevents them from unlocking big data’s true possibilities.
The pandemic has revealed the importance of a robust digital financial system, particularly in emerging markets.
To make this the decade where the unbanked move online, regulators must develop a centralised database by consolidating and centralising data from other regulatory parties such as financial institutions, insurers, telephone companies, aggregators, and payment services.
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