Role of Data Science in Risk Management

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Data Science creates meaningful information in large volumes to big data. Data Science gives scientific, creative, and investigative thinking to big data. Data is drawn from several resources, channels, and platforms like surveys on phones, emails, social media, e-commerce sites, etc.

The goal of Data Science is not to execute but to learn and develop new business capabilities. Data Science applications are useful when the data is a vital resource and can solve a query by giving correct and accurate information. 

Similarly, Data science techniques play a crucial role in detecting and analyzing various risks involved in any SOPs to be followed in the organization. In addition, the risk involved in accessing vital information, secure information, personal information, any banking or financial information, or online transactions. 

Check out Henry Harvin’s Data Science Course for learning basic as well as advanced data science techniques, tools, and methodology to handle large complex data and provide useful information that can be used as a powerful resource in various processes, SOPs, and applications.

Henry Harvin is a leading Data science institute that provides Advanced Data Science Courses to upskill your technical skills and become a useful resource to any organization. You can learn, how to implement Data Science Techniques for risk management in applications, online processes, and transactions. In addition, Henty Harvin in collaboration with E&ICT Academy, and IIT Guwahati, also provides various online courses in disciplines like Data Science, Digital Marketing, SAP, HR analytics, and more. Here is the list of Data Science Courses by E&ICT Academy, IIT Guwahati, such as:

• Basic Certification Course in Data Science with Python by E&ICT Academy, IIT Guwahati
• Advanced Certificate Program in Data Science & AI by E&ICT Academy, IIT Guwahati

After successful completion of the course, candidates avail the benefits of achieving a Dual Certificate for the applied Data Science Course one from Henry Harvin and another from E&ICT Academy, IIT Guwahati. 

Data Science creates meaningful information in large volumes to big data. Data Science gives scientific, creative, and investigative thinking to big data. Data is drawn from several resources, channels, and platforms like surveys on phones, emails, social media, e-commerce sites, etc.

However, it takes time for any new technology to be adopted and proved to be beneficial to the organization. Data Science techniques are result-oriented and have proven useful in various applications such as risk management, data analysis, and smooth SOPs in industry or automated access to data that is unique and provides useful information in various processes and applications. 

“If only you knew what question to ask me, I would give you some fascinating answers based on the data.”

Check out Henry Harvin’s Data Science Professional Courses 

Such a capability is powerful since we often do not know what question to ask.

It takes time for any new technology to be adopted by the economy and produce benefits to the Organization.

Data Science is the most recent wave with upgraded technology in today’s scenario. A study shows that an increase in profit and return on investment in data science is increasing day by day.

 

Effective Data Science Techniques for Risk Management

Data Science Techniques are highly effective in risk management across various industries due to their ability to analyze large volumes of data, data correction, and accuracy, identify patterns, and predict potential risks. 

1. Data Collection: Data science relies on the collection of large amounts of data from various sources. 
2. Data Cleaning and Preprocessing: Once collected, the data often needs to be cleaned and preprocessed to ensure accuracy and consistency. 
3. Exploratory Data Analysis (EDA): EDA involves visually exploring the data to understand its characteristics, and identify trends, patterns, and correlations.
4. Predictive Modeling: Data science techniques such as machine learning algorithms are used to build predictive models that can forecast future risks based on historical data. 
5. Risk Assessment: By analyzing data, and trending patterns, you can use predictive risk models to assess the potential risks. 
6. Continuous Monitoring and Adaptation: Risk management is an ongoing process, and data science techniques facilitate continuous monitoring of risks and their mitigation measures. 

Data Science Techniques are powerful tools for identifying, assessing, and mitigating risks in various domains. Applying data sciences enables organizations to maintain accuracy, make justified decisions, and minimize potential losses.

What is Data Science?

Companies apply data science to everyday activities to bring value to their customers. Most industries, such as banking institutions, are counting on data science for fraud detection successes. Companies like Netflix also use algorithms to analyze what to deliver to their users. Even advertisements on IRCTC websites are as per user interests taking a cue from the previous browsing history of the user, thus by using data available on the user’s computer system.

Data Science is evolving, and its application will continue to bring change. Data science may save money and improve the business process’s efficiency, but these technologies can also destroy business value. The risk of inability to identify and manage data can lead some managers to delay the adoption of the techniques and thus prevent them from realizing their full potential.

Data Science in risk management has always been a matter of measuring; it quantifies the frequency of loss and multiplies it by the severity of the damage. Any forward-thinking organization asses and tracks its risk factors and tackles complex challenges using Data Science as it provides analytical tools.

Looking forward to becoming a Data Scientist? Check out the Data Science Bootcamp Program and get certified today.

 

10 Applications of DATA Science to reduce risk and provide quick and smooth processing in various domains are mentioned below:

• Fraud and Risk Detection
• Healthcare
• Internet Search
• Targeted Advertising
• Road Travel
• Government
• Website Recommendations
• Advanced Image Recognition
• Speech Recognition
• Gaming

1. Fraud and Risk Detection: Data Science Courses for Risk Analysis

The earliest application of Data Science was in finance. Data Science was brought to rescue the organizations from losses. It helped them segment the customers based on past expenditures, current credits, and other essential variables to analyze the probability of risk and default. It also enabled them to push their financial products based on customer’s financials.

2. Healthcare: Role of Data Science in Healthcare Risk Management 

The Healthcare database of individuals who have been using the healthcare system for a long time helps identify and predict disease and personalized healthcare recommendations. E.g., some individuals are diagnosed with diabetes, and a subset has developed complications. Data Science becomes useful in drawing patterns of the complexities and probability of the complications, therefore, taking the necessary precautionary steps.

3. Targeted Advertising: Best Data Science Courses for Risk Management 

Digital advertisement gets higher click-through ratings rather than traditional endorsements. It is targeted based on users’ previous behavior. Automating digital ad placement is why the wife sees an apparel advertisement, and the husband sees a real estate deal advertisement at the same place and time.

4. Internet Search: Best Data Analytics Courses for Risk Analysis 

We have many search engines such as Yahoo, Bing, Ask, AOL, and Google. All these search engines use data science algorithms to deliver the best results, and it is their responsibility to verify the resources and achieve the correct result.

5. Website Recommendations: Data Science and Risk Management

E-commerce provides a personalized digital mall to everyone. Using data science, Companies have become intelligent enough to push and sell products as per customers’ purchasing power and interest through previous product searches. On Amazon, we get suggestions about similar products that we had earlier searched.

6. Road Travel: Data Science Implementation 

A perfect example is Google Maps, in which Google uses the road map data to update the app. The biggest challenge is to keep the plan updated on a real-time basis as it has to be updated as per the traffic in the particular area as well as any ongoing construction, roadblocks, bad weather, etc. with an alternative route.

7. Government: Top Data Science Courses for Risk Detection and Management

The government maintains the records of the citizens in their database, including photographs, fingerprints, addresses, phone numbers, etc., to maintain law and order in the country. This data helps the government in taxation,  passing on financial benefits to the needy, and even tracking down lost people.

8. Advanced Image Recognition: Data Science Techniques for Risk  Management

When we upload an image on Facebook, we get suggestions to tag friends. These automatic suggestions use a face recognition algorithm. Apple uses the same kind of software to segregate photos from the photo gallery. The online payment app uses a QR code to make the payments successful.

9. Speech Recognition: Advanced Data Science Techniques for Risk Management

The best examples of speech recognition products are Siri, Alexa, Google Voice, Cortana, etc. Nowadays, it is an added feature in almost every electronic product that uses a graphical user interface to take commands from its users. Speech recognition is being used to type messages on practically every message-sharing application.

10. Gaming: Data Analysis for Risk Management

Electronic games are designed using machine learning algorithms, which improve and upgrade themselves as the player moves up to the next level. In motion gaming, too the opponent (computer) analyses previous moves and accordingly shapes the games.

Instagram for photo sharing and marketing, Facebook for socializing, i.e., making friends, Linkedin for professional collaboration, and Tinder for dating are some examples of everyday applications/websites that use algorithms to match user interests and provide them a wholesome entertainment.

In older days, shopkeepers also used to collect data; however, the use was on a lower scale. As we know, the customer is king the shopkeeper used to observe the pattern of purchase in that particular locality and then fill his shop as per the requirement.

For new things that were to be introduced as there was risk associated with uncertainty, the goods were just bought in samples, and if accepted by the public, more of the order was placed. The same is the case with data science in risk management.

Data Science in Risk Management

Risk Management is the identification of risk in advance and taking precautionary measures to reduce or mitigate the risk. Risk can be physical or financial, and an assessment is needed to evaluate each risk and decide which ones to manage. Earlier risk management was done mainly through insurance.

The use of Data Science in risk management has several benefits. Risk managers have to work closely with their IT department to use these tools to provide risk-reward analysis, effectively. To use data science and machine learning, the intervention of persons running the business is required as they are the one who knows what is being calculated, while IT persons just make that happen.

Using Data Science to evaluate risks is a cross-disciplinary task. For a complete analysis, it is necessary to have good knowledge about the domain, excellent mathematics and statistics skills, and an innovative approach to problem-solving.

The Economist lists the types of risks of the industry as follows:-

• Retail banks worry about credit risk;
• Commercial banks focus on market risk;
• Investment banks are most concerned about operational risk.
• Data is the new science. Big Data holds the answers- ARUJANT

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