Every company has to deal with different sorts of risks while conducting business. Banking, financial, and insurance sectors are no different, rather, these are more risk-critical. Every decision must be taken by considering the potential threats that can be involved. For that reason, risk analysis is an integral part of decision-making. This increases the value of BI and data science in the BFSI sector to a great extent.

Banks, financial institutes, and insurance providers are threatened with several risks that originate from the market, competition, credit, and other sources. Banks can use massive customer and market data available to them to identify and score the risks and optimize costs accordingly. This helps in determining the creditworthiness of the customer and evaluate the risks associated with the advances.

Banks and financial institutes also need to maintain strict compliance with regulatory requirements. This also helps in identifying the risks and reducing their likelihood. For instance, customer KYC can help identify any suspicious account holder and also helps in legislative cases.