Tech firms are approaching the challenge of mining "big data"—immense repositories of information generated by industry and government—by using predictive analytics software to detect trends and anticipate coming events.
Applications of predictive analytics include sifting credit card transactions to spot fraud, targeted marketing through the combination of data from past transactions and predictive models for pricing and special offers, and customer retention by studying profits from the patterns across a consumer's lifetime. Statistical modeling and machine learning form the two central predictive analytics technologies.
PricewaterhouseCoopers' Steve Cranford says the use of predictive analysis is forcing companies to devise customer data management protocols, with implications for privacy and security. The explosive expansion of big data has led to a boom in identity theft and a widespread erosion of consumer privacy via hacking or inattention.
From Investor's Business Daily
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