How are Data Scientists Important in Finance?
How are Data Scientists Important in Retail Banks?
I wanted to start this blog as a few Data Scientists I had spoken to have mentioned they are less interested in Finance. This series will focus on how Data Scientists can make an impact in the Finance industry. The industry is so huge it would be hard to go into depth about all the key categories in Finance. In this blog, I will be covering the importance of Data Scientists in Banks, with the importance of Data Scientists in Funds and Trading Firms to follow in future blogs.
Data Scientists have usually spent 3+ years studying, Computer Science, Maths, Statistics, Physic etc. and are often approached by multiple recruiters to work in a Bank or Hedge Fund. A huge proportion of graduates want to work for a tech giant like Google or Amazon and work on really cool projects. However, are data science roles in Finance simply discounted because individuals are unaware of the cutting edge projects these firms are doing that are having a huge impact on their day-to-day life? Is it possible they are not aware of the work being carried out in this space?
Data has often been referred to as the lifeblood of the financial sector.
Picture this, you walk into your local bank branch, as you walk in, beacons installed sense a signal coming from your smartphone or you log on to your online banking and your smartphone scans your fingerprint or your eye and grants you access to your accounts without having to remember passwords etc. and the bank staff will have all the information about you already in real-time. These intelligence systems are moderated, updated and developed by a team of Data Scientists and the technology is often underpinned with machine learning techniques and extensive big data processing.
At Capital One, for example, data science algorithms have been making quite an impact by developing the next generation of financial products and services which cover nearly 60 million customers. Capital One were an early adopter of analytics and have been using advanced statistical modelling to personalize every single credit card since 1988. This use of analytics has helped to further the banks growth by over 20% earnings per share making Capital One the third largest provider of credit cards in the US. This simply would not have been possible without the investment in Data Scientists.
At Credit Suisse Data Scientists are applying data mining techniques and statistical analyses to build high quality risk monitoring solutions, which help identify new and emerging risk areas in the Bank. Data Scientists are also being utilised across the business to find novel opportunities to create revenue streams, retain customers and reduce expenses.
There has been a huge trend recently within Banking where Data Scientists are helping to launch and create new applications from data platforms. These applications can help financial firms incorporate data into every decision they make; they can automate data mining and predictive modelling for daily use and weave advanced statistical analysis, machine learning, and Artificial Intelligence into the Bank’s day-to-day operations. This is further proof of how important the role of a Data Scientist is in today’s Finance ecosystem.
Some of the large Banks are building new internal tech groups that are set up like a technology company. The end goal here is to give Data Scientists (and Software Engineers) a platform and working atmosphere that is more familiar to them and far removed from the clichéd culture everyone presumes is the case in Banking. The focus here is often on open source technology and greenfield projects.
Data Scientists are having a huge effect in combating payment fraud. Prevented fraud totals in the billions of dollars every year and this is often down to the predictive systems that Data Scientists have built and the algorithms they have designed. Every Bank in the world has a team of Data Scientists entirely devoted to protecting their customers.
Lastly, Data Scientists love data. That’s a given. Would you not want to work with ever-changing, alternative and unstructured data sets that really challenge you?
Working within Finance, you can truly make a difference, and make the world safer for millions of consumers. The importance of a Data Scientist should never be ruled out!
Stay tuned for the next blog post where I will be speaking on how Data Scientists are making an impact and have created many solutions within Hedge Funds.
If you’d like to discuss Data Science opportunities in Finance then please reach out to me at email@example.com