PETALING JAYA: More companies outside the traditional sectors of insurance, banking and finance are embracing the adoption of analytics software to aid in business decision-making.
The demand and interest in utilising analytics and decision management software is growing in Malaysia, said FICO country manager Dinesh Pereira.
“Since the middle of last year, we’ve seen a marked increase in queries from interested companies,” he said.
FICO is a US-based company, which provides analytics and decision-making services and software including credit scoring intended to help financial services companies. It has had a presence in Malaysia since 2005.
“Just recently, we signed on a client from the manufacturing sector who was looking to optimise the procurement of raw materials via the use of analytics software,” Pereira said.
He said the expanding roster of industries adopting predictive modelling, analytics and optimisation software is a worldwide trend and includes the healthcare and retail industries.
“For healthcare, clients are looking at fraud detection for claims while those in retail are keen to use software solutions such as ours for transaction patterns and purchase history,” he said.
Within the banking and finance sector — a traditional stronghold of analytics software — banks are getting more sophisticated in their use of such tools.
FICO senior director of product management, Andy Flint, explained that this was mainly due to the need to ease the pain of addressing increasing regulatory requirements.
“There’s now increased scepticism in over fancy algorithms and math, especially due to the unchecked lending and financial meltdown that happened in the United States.
“Regulators want to guarantee that a similar situation doesn’t happen in their country and have upped the game in regulatory demands, which in turn creates pressure on banks,” Flint said.
In response to client requests for a more resource-efficient method of addressing increased rigor around tracking and audit requirements, FICO recently launched its Model Central Solution.
The solution integrates models from various programming languages into one environment, saving time and IT resources. It also offers integration of simulation and testing capabilities and optimisation of decisions.
“Our clients tell us that about 80% of their analytics resources is spent on responding to regulatory queries,” Flint said.
He said that in the past much of such work was outsourced, but now it increasingly makes more sense for banks and other financial institutions to have it moved in-house. However expertise in this field is not found in high volume.
“This is where software which automates much of the processes behind predictive models and data mining can help ease the burden and make insight from available data accessible to a wider audience,” he said.
However, Flint cautioned against the common misperception that predictive modelling analytics provides a “perfect crystal ball” to the future.
“The outcomes derived from the use of this software are not set in stone, but developed with care and regularly checked, predictive modelling analytics can provide powerful insights to better inform the decision makers,” he said.
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