Data Analytics:

Data Analytics involves collecting and analysing data to uncover patterns and
insights that can inform decisions. Data analytics processes this information
to uncover patterns, such as workout trends or equipment usage, that can
guide decision-making.

How big is the financial data analytics market?

The global financial analytics market was valued at USD 8.78 billion in 2023 and
is projected to grow from USD 9.68 billion in 2024 and reach USD 23.04 billion
by 2032, exhibiting a CAGR of 11.5%.

Financial analytics provides accurate and timely insights into a company’s

financial health, enabling business leaders to make data-driven decisions that
enhance profitability and sustainability.
 Who uses data analytics in finance?

 Finance data analysts

 These professionals use data analytics to help financial institutions make
business decisions
 Financial data experts
 These experts create analytics tools to analyse and present financial data to
decision makers

5 Important Steps in finance Analytics:

Data Collection and Integration

 Gather financial data from internal and external sources (e.g.,

accounting systems, market trends, sales data).
 Integrate this data into a unified system for analysis to ensure
consistency and accuracy.
Data Cleaning and Preparation

 Cleanse the data by identifying and correcting errors, missing values,

or inconsistencies.
 Standardize and pre-process the data to make it suitable for analysis
(e.g., handling duplicates, formatting).

Data Analysis and Insight Generation

 Use statistical methods, financial models, and tools to analyze key

financial metrics (profitability, liquidity, expenses).
 Identify trends, patterns, and correlations that provide actionable business
insights.

Forecasting and Predictive Modeling

 Apply predictive analytics and forecasting techniques to predict

future financial outcomes (e.g., revenue, costs, market trends).
 Use machine learning or time-series analysis to make data-
driven predictions and inform decision-making.

Reporting and Decision Support

 Visualize and present the insights through dashboards, charts, and

reports for clear communication.
 Provide recommendations based on the analysis to support
strategic business decisions (e.g., budgeting, investment, risk
management)

Why data analytics in finance industry?

The finance industry is deeply affected by many global events such as the
pandemic, convergence of industries, and rapid technological evolution driving
digitisation. The profitability of these businesses depends a lot on eliminating
risks and closely following and interpreting various market trends. Whether
banking or insurance, customers look out for better, more convenient, or
relatable services, which finance data analysts can help identify through
detailed analysis. Data analytics in finance aids intelligent data-driven
decisions to discover new markets, design new products and services, become
more operationally efficient.

Types of Data Analytics:

Benefits and Challenges of Financial Data Analysis

Different financial analytics project used in various scenario
 Financial Analytics companies

Reliance’s next wave of value creation is built around multiple hyper-growth

engines that will redefine the way India connects, consumes, and grows.
These transformative initiatives are instilled with Reliance’s core belief of
facilitating inclusive growth.

Why Reliance Mobile failed?

In February 2019, the company filed for bankruptcy as it was unable to sell
assets to repay its debt. It has an estimated debt of ₹500 billion (equivalent to
₹620 billion or US$7.3 billion in 2023) against assets worth ₹180 billion
(equivalent to ₹220 billion or US$2.6 billion in 2023).
Key Measures Taken by Reliance Jio to Overcome Crisis:

5G Rollout and Network Optimization: Fast-tracking 5G deployment to

offer high-speed data services.
Affordable Pricing: Continuation of low-cost data plans to maintain a
competitive edge in the market.
Expansion of Digital Ecosystem: Leveraging Jio Platforms and offering a
wide range of services beyond telecom, including e-commerce, OTT content,
and digital financial services.
Strategic Partnerships: Attracting investments from global companies and
forming alliances to support technology advancements.
Rural Expansion: Focusing on affordable mobile services and devices like
JioPhone to penetrate rural markets.
Customer-Centric Innovations: Enhancing customer service through AI and
providing personalized offerings.
Financial Services Expansion: Launching Jio Financial Services to offer
digital banking and fintech solutions.
Sustainability Initiatives: Adopting green energy and sustainability
measures in telecom operations.
IoT and Smart Solutions: Entering the IoT market to diversify its revenue
streams.
Covid-19 Response: Expanding digital services to meet the surge in demand
during the pandemic.

What are the future goals of Reliance Industries?

Reliance aims to become Net Carbon Zero by 2035 by doing the following:
creating sustainable energy and materials for India’s future needs; building
world-scale assets that produce clean fuels and materials of the future;
developing next generation carbon capture and storage technologies to
convert carbon dioxide into useful products and chemicals; transition from
fossil fuel to clean and affordable energy; creating holistic and circular
materials businesses; and maximising crude to chemicals conversion. The
setting up of the greenfield Giga Factory Complex at an investment of INR
60,000 crore will accelerate Reliance Industries' Net Carbon Zero mission by
enabling it to transition to sustainable energy production of a high
magnitude. Reliance plans to set up the following Four Giga Factories under
this project:
1. An integrated solar photovoltaic module factory.
2. An advanced energy storage battery factory -for the storage of intermittent
energy
3. An Electrolyser Factory for production of Green Hydrogen
4. A Fuel Cell Factory for converting hydrogen into motive and stationary power

Future Competition:

Reliance Jio is preparing to compete with Elon Musk’s Starlink if it launches in

India. Jio has also partnered with Nvidia to enhance its AI infrastructure.
Reliance aims for Jio’s IPO to become the largest in Indian history, overtaking
Hyundai’s $3.3 billion IPO from this year.

Bank Risk Assessment Project

Goal Solution Impact

To validate the To approve the loan Helps bankers in

customer is eligible for or to Reject the loan decision making,
the loan or not segmenting customer
based on risk profile
Overview: The objective is to predict whether a customer will default on a
loan based on various features related to their credit history, personal
information, and financial status. The target variable for this prediction is
“TARGET”, where a value of 1 indicates default and 0 indicates no default.

Software/Application Purpose Data Collected Predictive Use

Predicts credit
Manages Customer account
risk, default
Core Banking customer balances,
probability, and
Software accounts and transactions, loan
customer
transactions and deposit data
behavior
Predicts overall
Credit risk, market risk exposure,
Risk Management Analyzes and risk, liquidity risk, models risk
Software quantifies risks stress testing, scenarios, and
scenario analysis assesses potential
future risks
Predicts customer
Manages Customer
default risk,
CRM Software (e.g., customer demographics,
classifies
Salesforce) interactions credit history,
customers into
and profiles behavior patterns
risk segments
Loan performance, Predicts credit
Manages loan
Loan Management repayment history, risk, loan default,
origination and
Software defaults, collateral and repayment
servicing
information behavior
Cash flow
Manages projections, Predicts liquidity
Treasury liquidity, cash interest rate risk, risk, currency risk,
Management flow, and market exposure, and market
Systems investments investment exposure
portfolio
Manages Predicts financial
Financial
Financial Accounting financial stability, capital
statements (P&L,
Systems transactions adequacy, and
balance sheet),
and reporting liquidity risks
 Software/Application Purpose Data Collected Predictive Use
capital adequacy
ratios
Predicts
Compliance
regulatory risks
Ensures reports, audit
Compliance and ensures
regulatory trails, regulatory
Management Tools adherence to
compliance data (e.g., Basel III,
compliance
AML/KYC)
standards
Predicts future
Aggregated risk risks by
BI and Analytics Tools Visualizes and
data, KPIs, trend visualizing data
(e.g., Tableau) analyzes data
analysis trends,
forecasting
market conditions
Predicts
Logs of security
Monitors cybersecurity
Cybersecurity and IT incidents, system
cybersecurity risks and
Tools vulnerabilities,
risks operational
operational data
failures

Steps involved in Bank Risk Assessment:

1. Data Collection: Collect data from various internal and external

sources such as core banking systems, fraud detection, credit scoring
models, AML systems, CRM systems, etc. (e.g., transaction data,
customer behaviour, credit scores).
2. Data Pre-processing: Clean, validate, and pre-process the collected
data by handling missing values, removing duplicates, and normalizing
data.
3. Feature Engineering: Create new features or variables that may
improve the performance of machine learning models, such as
aggregating data, transforming features, and encoding categorical
variables.
4. Model Selection: Choose appropriate machine learning algorithms to
predict various types of risks (e.g., credit risk, fraud risk, liquidity
risk).
 5. Model Training: Split the data into training and testing sets, and
train the model using the training dataset.
6. Model Evaluation: Evaluate the model's performance using
various metrics such as accuracy, precision, recall, AUC-ROC, F1
score, etc.
7. Risk Prediction and Forecasting: Use the trained model to predict
future risks by analyzing historical data and providing forecasts for
future outcomes (e.g., likelihood of loan default, fraud occurrence).

Conclusion:

The benefits of using Business financial analytics cannot be overstated. By

leveraging the power of financial data, businesses can make better-informed
decisions, manage risks more effectively, increase profitability, and enhance
operational efficiency. Moreover, financial analytics promotes better financial
planning and fosters a culture of transparency and accountability within the
organization. Implementing financial analytics may require an initial
investment in technology, data infrastructure, and human resources