Because of huge volumes of data, predictive modeling
is critical in automating processes and detecting patterns in insurance,
banking, securities, credit processing, auditing, etc.
Fraud is a significant challenge in many industries. Perpetrators take
advantage of the huge volumes of data that companies must process with limited
resources. Predictive models help by quickly scanning many thousands of
cases (claims, transactions, customers, etc.) and flagging those that are
questionable for further review.
Credit Application Scoring: Predictive models
have been used for many years to determine if a given applicant is an
appropriate fit for the targeted risk profile of a given credit related
Portfolio Management: Predictive models can
identify stocks and sectors that may fly and those that are likely to crash.
Market Timing: Conventional wisdom says "the
market cannot be timed." However, predictive models are used daily
to pick position entry and exit points in order to maximize return and