Big data analytics in the financial services industry: Trends, challenges, and future prospects: A review

Abstract

This paper provides a comprehensive review of the evolving role of big data analytics within the financial services industry, highlighting current trends, inherent challenges, and future prospects. The objective is to synthesize existing research and practices to understand how big data analytics is transforming financial services, including banking, insurance, and investment sectors. Through a systematic examination of peer-reviewed articles, industry reports, and case studies, the research methodology encompasses both qualitative and quantitative analyses to offer insights into the adoption, implementation, and impact of big data analytics. Key findings reveal that big data analytics is pivotal in driving innovation, enhancing customer experiences, and improving operational efficiency in financial services. It plays a critical role in risk management, fraud detection, personalized financial advice, and algorithmic trading, among other areas. However, the industry faces significant challenges, including data privacy concerns, regulatory compliance, technological infrastructure requirements, and the need for skilled professionals. The paper concludes that while big data analytics offers substantial opportunities for the financial services industry, realizing its full potential requires addressing existing challenges through strategic investments in technology, human capital, and data governance. The future prospects of big data analytics in financial services are promising, contingent upon the industry's ability to adapt to rapid technological advancements and evolving regulatory landscapes. This review underscores the importance of continued research and collaboration between industry stakeholders to leverage big data analytics for sustainable growth and competitiveness.