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Banks and Big Data

Banks and Big Data

Your financial institution has access to your name, phone numbers, home and work addresses, social security number, credit card data, account information and whatever other personal information you use as your security checks. This information has turned banks, credit unions and alternative lenders into technological companies that are driven by data with the ability to analyze millions and billions of data points. In a market where companies would do anything for this type of data, what are your financial institutions using it for?

  1. Fraud Detection: because we have the ability to use our financial information anywhere at any moment, fraud has become more prevalent. To combat the fraudulent use of credit card and identity information, financial institutions are using your data to detect falsified transactions among all of your legitimate account activity. Has your bank or credit card company ever called you in order to approve a transaction? It was most likely because this transaction was unusual to your spending history based on the data your financial institution analyzes about you.
  2. Risk Management: your data isn’t only being used to keep you safe; your financial institutions are also using your data to protect themselves. Banks can use your data to monitor your spending and credit activity and make predictions as to how your portfolios will perform over the course of a fiscal year, based on this they can decide to extend or decrease your lines of credit, or refinance your loans.
  3. Target Marketing: financial instutitutions are also using your data to get to know you better so they will be able to target specific offers, deals and advertisements specifically at you. This data helps banks and credit card companies better understand how you behave financially so that they can target deals and sales on that to give them better success rates.

Big data is trending right now as more and more companies are realizing how valuable all of this information actually is. Due to the Heartbleed bug and other large data breaches at companies like Home Depot and Target, people are also being way more careful with how they handle and allocate all of their personal information. Financial institutions are kept secure under lock and key, both physical and digital, but we do give them a wealth of our extremely sensitive personal data. Due to this growing concern about our personal data, we have decided to delve deeper to get a better understanding of what it is financial institutions actually do with your personal information.

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