When many people hear the words “fintech” and “data science,” their eyes begin to glaze over, and they look rather bewildered. Whether you are aware of it or not, however, these two realities likely already play a major role in your life, so it is good to have at least a basic conception of what they mean and how they fit together.
What Is Fintech?
Fintech is short for “financial technology,” and it refers to all the ways that the financial industry has used technology to automate is financial services. If you have ever paid a bill online or accessed your bank account online, you have used fintech. If you have used your cell phone to make a purchase or deposit a check or made a donation, you have used fintech. If you have ever dabbled in crypto-currencies, you have also used fintech. Basically, then, fintech has allowed financial transactions to enter into the world of modern technology.
What Is Data Science?
The goal of data science is to capture, process, analyze, communicate and maintain data. Data scientists are the people who figure out new ways to acquire and enter data, who classify it, who report and present it to others, who look for patterns and meaning in it and who keep it safely stored. Data scientists work to make sense of the huge amounts of data that surround us all the time in this modern world.
How Do Fintech and Data Science Work Together?
Fintech and data science fit together like the proverbial hand and glove. In fact, fintech companies would be quite lost without data scientists and data science companies like Cane Bay Partners to help them manage and analyze all the data they collect each day. There are, in fact, many ways that data science serves fintech.
First, data science allows fintech companies to better manage their transaction records, for it helps companies collect data more efficiently and store it safely. Data science can also analyze that data to help companies launch reward programs and other customer incentives.
Second, data scientists help fintech companies detect and prevent fraud by providing warning systems that recognize suspicious patterns in data.
Third, data science keeps fintech companies at the head of debt collection, allowing companies to notice when customers have passed their due dates and helping prevent such occurrences through prediction models.
Fourth, data scientists assist fintech companies in managing and maximizing their assets. Through data analysis, companies can discover patterns that point them toward optimizing their portfolios, setting prices and allocating capital.
Fifth, data scientists help fintech companies minimize their credit risk by accurately checking customers’ credit using many more data points for a clearer picture.
Sixth, data science provides fintech companies with greater security for their customers’ data. This leads to better customer relations and peace of mind for companies and customers alike.
While fintech and data science are certainly complex subjects, they impact your life every time you make a financial transaction using technology. It’s good, therefore, to have at least a basic understanding of this wave of the future in the financial industry.