Technology has been changing the world since the invention of the wheel. Computers and the internet have had a major impact on entertainment, living and certainly in business. Data science, an extension of statistics is now a vital part of business, especially the online variety. There is also financial technology. (fintech) which has streamlined banking and lending. The two are closely connected as data science supports fintech. The data is the fuel upon which fintech runs.
Uses of Data Science
Data science involves more than just collecting and storing data. Companies such as Cane Bay Partners, are able to thoroughly analyze data and supply its findings to financial companies. It’s the analysis that takes statistics to the next level.
Companies like Amazon use data science to recommend products to customers. The recommendations are based on a person’s shopping history. The analysis allows companies to make accurate predictions about what customers might be interested in.
Social media sites also use data science when they suggest people you might know or groups that might interest you. The same type of data collection and analysis allows them to match people up with each other and with interests.
Data science has also been used to assess the odds of sports franchises winning championships or to pick the winners of Grammys and Oscars. It’s been a big part of bookmaking, both legal and illegal, for decades.
Fintech uses technology to help businesses of all kinds manage their finances better and easier. Fintech also led to the development and rise of cryptocurrencies such as bitcoin.
Supported by data science, fintech has helped launch businesses that can cater to customers previously inaccessible. For example, many people who are unable to qualify for a credit card or bank loan are able to borrow money for retail purchases using Affirm. Thanks to data science, Affirm is able to collect and use data on potential customers’ employment and financial history. More people can qualify. Though the interest rates are high, it’s a boost to people who can’t get a loan the traditional way and it can help them to start building a good credit score.
There are also mortgage companies that use data science and fintech the same way. People who never dreamed of owning a home can apply online and get a notification within 24 hours. Again, it is the intensive data analysis that allows these mortgage brokers to take on these customers. Good for business, good for consumers and good for the economy.
The Future of Fintech
Moving forward, fintech will further make significant changes in the field of finance. Currently, FICO scores are the major factor in determining whether or not an applicant is qualified for a loan. The loan company Upstart, is seeking to make FICO scores obsolete by using data science to more accurately predict the ability and likelihood of a potential customer to pay back a loan.
Fintech is one of the latest applications of computer technology to change business. It streamlines transactions of all kinds and can open up financing to those who previously could not qualify for it. Behind fintech is data science, providing the information that makes it work.