Banking / Finance

Big Data Analytics to Mitigate Risk in Banking, Insurance

26th Aug `13, 10:50 AM in Banking / Finance

In today’s economy, financial services firms and insurance companies are forced to contend with heightened regulatory environments and…

BDMS
Guest Contributor
 

In today’s economy, financial services firms and insurance companies are forced to contend with heightened regulatory environments and a variety of market uncertainties.

shutterstock 16137337 300×294 Big Data Analytics to Mitigate Risk in Banking, InsuranceThat’s why it’s more critical than ever for these enterprises to make effective use of big data analytics to pinpoint and mitigate potential exposure to risk and loss.

The fact is, risk levels remain high and are on the rise for banks and insurance companies around the world.
Many countries that have relatively low risk scores compared to their global peers are seeing their risks increase incrementally, according to a report by Standard & Poor’s Rating Services’ Banking Industry Country Risk Assessment.
In Canada, for example, “the acceleration of household debt to record highs has, in our view, increased Canadian households’ vulnerability to sudden shocks in incomes, employment, or a spike in interest rates,” according to the report.

Since loans by Canadian banks to the consumer sector account for nearly three-fifths of total bank loans, “a substantial shock to household creditworthiness could boost losses on banks’ uninsured loan portfolios,” the report notes.

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