Market Trends of Risk Analytics Industry
BFSI is Expected to Witness Huge Adoption of Risk Analytics Solutions
- Banks across the world are realizing that they need a more rational approach to managing a growing plethora of risks enveloping the banking and financial industries' landscape, and they have now understood the significance of risk analytics.
- Risk analytics enables banks and financial institutions to move away from the 'silo' approach to risk management and move toward the comprehensive view of enterprise-wide risks. For instance, in operational risk management (ORM), the number of transactions that need to be monitored is growing exponentially, thus implying pressure on the current banking infrastructure and enabling the market for risk analytics.
- Financial Organizations are under intense pressure to reduce fraud and meet strict regulatory compliance requirements while growing their business. Moreover, New Account Fraud and Account Takeover are the top two types of fraud challenging financial institutions today. Risk analytics solutions protect against these and other fraudulent activities across online and mobile channels, using machine learning-based risk analysis, a form of AI.
- Data analytics can be used in a variety of ways by banks to protect themselves from danger. Customer analytics, for instance, can be used to categorize customers according to their creditworthiness for credit risk management. Because one can rely on those customers to make payments on time, doing so lets individuals choose a target market for credit products and lowers exposure to default risk. According to the Global Association of Risk Professionals, it is estimated that capital markets, banking, and insurance sectors are likely to spend USD 96 billion on risk information technologies and services.
- Additionally, the Grant Thornton survey study identified that 85% of respondents believed that their bank's data and risk information management initiatives need additional efficiencies to realize their full potential. Furthermore, 82% had indicated the same for their institution's risk analytics and measurements. Hence, such trends drive the need for risk analytics solutions in the BFSI industry.
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North America is Expected to Hold a Significant Share
- North America is expected to hold the highest market share, with the United States leading the market. The dominance of the region is due to its increasing adoption of risk analytics solutions among end-user industries, a significant presence of large enterprises, and drive for early technological adoption owing to competition from other businesses operating in low-cost regions.
- Moreover, adopting cloud computing across industries is driving market growth. The task of protecting Healthcare Information Systems (HIS) from immediate cyber security risks has been intertwined with cloud computing adoption. The data and resources of HISs are inherently shared with other systems for remote access, decision-making, emergency, and other healthcare-related perspectives.
- Additionally, there have been 28 data breach incidents reported during the pandemic year in the United States, including email hacking incidents, malware attacks, and unauthorized access to EHRs (source the US Department of Health & Human Services). In the medical healthcare sector, cloud computing is considered to be an immediate remedy because it is scalable as well as economical.
- The healthcare infrastructure in the United States is experiencing positive trends in the predictive analytics domain. Studies have shown that in the last few years, more than 40% of healthcare executives reported a 50% increase in data volume. As the data sets become bigger and more difficult to handle, health systems and payers increasingly adopt predictive analytics.
- Moreover, the region has a strong foothold of risk analytics vendors, which contributes to the growth of the market. Some of them include IBM Corporation, Oracle Corporation, SAS Institute Inc., and AxiomSL Ltd, among others.
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