The rise of big data, computing power, and advanced analytics enables companies to gain valuable insights from data. Artificial intelligence, machine learning, the Internet of Things, and drones are just a few innovative tools now available to help companies gain a more complete view of their businesses and make better decisions. For risk managers, using big data and risk analytics provides an unprecedented ability to identify, measure, and mitigate risk.
Benefits from risk analytics
Tracking and analyzing risk factors in real time provides huge benefits because you know immediately when anomalies occur and can quickly react to make changes to alleviate risk.
Using advanced analytics, you can:
- Create alerts to monitor for anomalies and outliers in real time and know instantly when problems arise. The faster you know where problems are, the sooner you can fix them.
- Utilize real-time portfolio monitoring and evaluate performance across key parameters. Analyzing performance in real time enables you to quickly adjust the portfolio to improve performance when necessary.
- Use machine learning algorithms to identify high risk customers and reduce charge-off losses by screening for risky deals.
- Simulate portfolios and evaluate the potential impacts of possible trades, disruptions, and events and create the portfolio that meets goals for profits and risk.
- Track credit breaches in near real time and analyze risk limit breaches by trader, profit center, and trading desk level.
Big data is changing the way businesses are run, enabling businesses to analyze massive amounts of information about operations in near real time. Risk analytics enables you to take that data to understand and reduce risk.
This article originally appeared in finextra.com.com To read the full article, click here.