How is Analytics changing the World of Finance?

Imagine that you, as a CFO, login to see a dashboard that gives the vital financial and operational metrics on a real-time basis, shows how it affects your profit margins & other financials and simultaneously give possible actions to be taken to mitigate or minimize losses. 

All of these in a single screen!

Power of Analytics

That is the power of Analytics in Finance. It is a game changer and companies are racing to incorporate this concept and enhance their business value. This is most important in finance given the fact that finance is mainly about numbers and making sense out of it and analytics does it seamlessly. Clients go with solutions backed by facts and statistics rather than intuition and opinions.

Diving deeper, concepts like Generative AI, Machine Learning and personalized insights are buzz words in the business world. Some companies have come up with GPT that helps investors make right investment decisions. From giving a fixed set of FAQs on site to offering a humanized chatbot to clarify doubts, Gen AI has enhanced the customer experience drastically.

But nothing is flawless. If you had used any GPT for a considerable time, you would realize that it always plays the safe game. It would say yes even if there is a 1% chance of it being possible. But you’ll have to make the final decision considering the situation in hand. Also, if you question the given answer, it might change its answer the next time and apologize for the same.

These novel concepts are fun, interesting and have great potential in future. So what can we, as students do about it?

With a huge number of data sources, open source softwares and possible use cases, one can build their own models, dashboards and algorithms focusing on snippets of ideas at a time. These projects add great value on resumes.

Possible Use Cases

1. Trading Algorithms – One can start with a simple model of automating a specific indicator or a combination of two to execute orders.

2. Build a dashboard that gives key metrics that help investors make decisions. This can be the gainers and losers for the day, index movements, ratio analysis etc.

3. Sentiment Analysis – Given a financial event, provide summarized insights measuring the impact of the event and the reaction of the public.

These possibilities are endless and the same goes with opportunities. It’s within our control that we upskill and stay relevant in the industry.