Professional Documents
Culture Documents
Velocity
• Batch process
• Near real-time
• Real-time
Diversity
• Structure transactional data Volume
• Unstructured/semi-structured data • • Records in terabytes,
from social source petabytes
Figure 1
Data Science: Usage Areas For example, using a mobile app, banks can
analyze individual consumer behaviors and
Many business areas can benefit from data sci-
spending activities and combine that data with
ence (see Figure 2). To properly ascertain how
credit bureau information. When analyzed, the
customers prefer to be served, banks can apply
resulting insights can lead to better targeted
such data science techniques as hypothesis test-
messaging around a potential offer, such as a
ing, crowdsourcing, data fusion and integration,
pre-approved home loan to a customer who is
machine learning, natural language processing,
qualified based on analysis of the data contained
signal processing, simulation, time series analysis
in his transactional files and interactions on social
and visualization. Using the insights gleaned from
media.
these approaches, marketers can derive the right
marketing strategy through a mix of marketing The vast amounts of online data have much
messages and offers that resonate with individual to offer banks seeking consumer insights. For
customers and segments. instance, by combining information from travel
Web sites and spending patterns gleaned from
internal databases, banks can optimize their
Applying Data Science product mix and offers. Analysis of transactional
behavior like recency, frequency and monetary
value can be sliced and diced to derive customer
profiles that can improve the effectiveness and
efficiency of targeted marketing efforts. An
Consumer example is an Australian bank that is working
Sentiment
with a retailer to better understand where the
retailers’ customers live, when and where they
Fraud Intelligent
Forecasting shop, and how much they spend. This informa-
Detection Data tion is then used to refine the retailer’s branch
Science Areas
location/relocation strategy.4
of Usage
Another example is a bank that uses point of sale
Customer Consumer data to determine whether a customer frequents
Service Profiling a certain area for shopping or lunch and then use
this information to deliver online offers that are
Target highly personalized even to the type of food the
Marketing
customer prefers, increasing the probability that
the offer would be accepted. Adding device-spe-
cific capabilities, the offer could be delivered by
Figure 2 SMS at the most logical time for decision-making.
Quick Take
Applying Data Science to Detect Fraud Before The Fact
As an early warning system, data science solutions false positive rates (declines on legitimate trans-
can help banks quickly identify potentially actions).
fraudulent behavior before the fraud becomes
material. For example, individual cardholders are Text analytics of unstructured data can help banks
creatures of habit. Cardholders have “favorites“ identify patterns of information that indicate the
or recurrences over a wide variety of objects in likelihood of fraud. Text mining of insurance claim
their transaction streams. These objects might descriptions (written and recorded) provided by
include favorite ATMs that are close to work or bogus claimants uncovered some very interest-
home or gas stations along a daily commute, as ing facts. It turns out that certain phraseologies
well as preferred grocery stores and online sites (the use of “ed” rather than “ing” on the end of
for shopping. verbs, for instance), are extremely indicative of
fraudulent claims. This is due to the different ways
An analytics technique that could be used to in which people relay stories they actually expe-
improve fraud management is to identify card- rienced vs. those they concocted; for instance “I
holder favorites, in order to distinguish between was walking” is indicative of someone recounting
“in-pattern,” or normal, customer spending and an actual experience whereas “I walked” often
“out-of-pattern” suspicious transaction activity. turns out to be indicative of someone describing
This enables faster fraud detection at much lower a fictitious event.
Detailed
ailed
Implementatio
Implementati
ion implementatio
on
strategy plan
Concept
cept note/
note
proof off concept
pro
I
Internal, external,
social data analysis by
data science
consultant
B siness
Bus
objective
Figure 3
Footnotes
1
For more information on Code Halos, please see our white paper, “Code Rules: A Playbook for Managing
at the Crossroads,” or our recently published book, Code Halos: How the Digital Lives of People, Things
and Organizations Are Changing the Rules of Business.
2
Wikipedia definition, http://en.wikipedia.org/wiki/Big_data.
3
“Three Reasons Why BI and Analytics Is The Top CFO Initiative,” Domo,
http://www.domo.com/learn/3-reasons-why-bi-analytics-is-the-top-cfo-initiative.
4
Anthony Duffy, “Unlocking the Potential of Big Data,” Banking Technology,
http://www.bankingtech.com/58812/unlocking-the-potential-of-big-data/.
Siddhartha Nainwani is a Consultant within Cognizant Business Consulting’s Banking and Financial
Services Practice. He has over seven years of business and IT consulting experience, working with
leading banks in business process management, business analysis and test management across various
geographic locations. Siddhartha holds a bachelor’s degree in engineering in information technology
from Shivaji University, Maharashtra, and a master’s degree in management from ICFAI Business School,
Mumbai. He can be reached at Siddhartha.Nainwani@cognizant.com.
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