A risk worth taking: Making data a company’s best friend, not its most costly mistake

Within both the business world and our personal lives, data is becoming increasingly intrinsic to everything we do. Whether it’s picking which restaurant to order from, a tailored advert or figuring out the quickest route home, data is a part of our everyday decision making.

For businesses, the value of data is constantly rising. Using analytics and AI, they are now able to use data to better understand their customers and provide a more tailored service. Ultimately, this helps them create happy customers and maximise profit. Not only that but it can be used to find efficiency savings, enable better risk management and protect against losses from fraud.

However, as I discussed with our SAS Collaborators Bill Mew and Jen Stirrup, as the value and volume of data rises so does the risk attached to it. The ever-increasing risk of a cyberattack leaves businesses in constant danger of financial and reputational damage. Therefore, to make it a risk worth taking, businesses must ensure they are using data analytics to its fullest potential.

Whether it’s being used to enhance the customer experience in retail or provide the most appropriate insurance rates, analytics is increasingly being used to benefit both customers and companies. As this benefit is acknowledged and innovative technologies such as telematics become more commonplace, the amount of data being produced and stored is increasing.

However, as one of our Collaborators, Bill Mew, suggested, the rising volume of data is being accompanied by a constantly evolving cyberthreat.  We have seen businesses such as Travelex, EasyJet and Zoom fall victim to cyberattacks, resulting in reputational or financial damage and, in some cases, both.

There are, of course, processes that businesses can put in place to mitigate against these risks. However, it is all but impossible to negate them completely. Therefore, businesses should place high priority in ensuring that they are deriving full value from their data. If they are going to contend with the risk of data, they must ensure the benefit is far greater.

Focussing on the insurance industry, the potential benefits attached to advanced data analytics are huge and many businesses are missing out on this.

Firstly, by leveraging analytics and AI, customer data can be used to provide a more personalised customer experience. By analysing the data available to them, businesses can create insights which will allow them to both identify insurance cover which customers might need most and to provide insurance rates specific to that individual’s risk.