Why Automated Predictive Analytics Is the Future of Financial Services

“One area of expanding impact in predictive analytics automation is “next best offer” (NBO) frameworks. Already common across e-commerce platforms like Amazon, NBO tools use available information — in this case, which products consumers are looking at or have in their carts — to suggest other items that are complementary or have been purchased by other customers under similar circumstances. If a consumer is purchasing an inflatable raft, an NBO tool might suggest life jackets, paddles or air pumps.

As noted by “The Startup,” NBOs typically rely on what are known as “collaborative filtering” models that leverage massive data sets about both products and consumers. Financial firms, however, are often data rich and product lean. While banks collect massive amounts of client information to deliver better service and provide targeted recommendations, their product sets are comparatively much smaller than any e-commerce counterparts.”


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