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A hot topic in the financial services industry is the dawn of more powerful predictive analytics. Using these robust tools, companies can gain insight into the probable future of customers, financial trends, and the industry at large. In a panel titled, “Seeing the Future: The Power of Prediction Markets & Advanced Data Analytics,” held at the recent Money 20/20 conference, experts from around the industry offered insight regarding the use of this data in establishing best practices and adjustments to guarantee growth and profitability.
Leading off the discussion was a talk regarding the level of acceptance for predictive data. As this data proves itself to be robust and, more importantly, accurate, the general public has come around to the idea that while these tools may not be able to predict outcomes with 100 percent certainty, they are enormously valuable in providing a framework for future decision making.
“The Internet and the way people have become connected over the last four to five years has really expanded the pool of participants in collecting data to inform these models,” Robin Hanson, associate professor of economics at George Mason University, said during the session.
By aggregating the data of this increasingly massive group of users, predictive data is only getting smarter in the ways it charts future actions. Following this line of thinking, predictive analytics is only good as the data informing it: The best algorithmic predictions are the ones backed by strong and extensive data collected from past events.
Whereas marketers or CX professionals may have adopted a trial-and-error approach to customer engagement before these models were available, they’re now able to inform each new decision’s results using the data gathered from the previous. Depending on the feedback loop between the decision and the resulting data, these predictive analytics give an unprecedented edge in agility when devising a marketing or financial strategy.
The power of data has transcended any trace of skepticism. Marketers know now more than ever before that data analytics is a key component of success. With the predictive measures now available to the companies willing to make the investment, this data cannot only measure the past but effectively create a road map for future choices that learns from previous instances to tangibly improve chances for a strong positive outcome.
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