Let me begin with a disclaimer. I believe that what I'm about to tell you is true, but have no way of proving it. Apparently, a grocery superstore in the U.K. has become so adept at mining transaction data into insight that it can predict which couple is heading for divorce, based on what and how they're buying!
That's the power of predictive analytics, a science, which has made deep inroads into several industries and is now doing the same in banking.
So, what's new? Haven't banks - the producers and consumers of more data than most other industries, been mining it since ages?
Yes, but data mining and analytics aren't the same thing. To cut a long story short, the latest analytics solutions have the ability to process petabytes of data into predictive insights, in near real time. This means that in theory, banks can derive key insights into the outcome of an action, even as they execute it. In practical terms, this could mean the difference between stopping fraud in mid-transaction or raising the alarm after the deed is done.
