Tech
PREDICTIVE ANALYSIS: Revealing The Future
Predictive analytics encompasses a variety of statistical techniques from data mining, predictive modeling, and machine learning, that analyze current and historical facts to make predictions about future or otherwise unknown events.
In business, predictive models exploit patterns found in historical and transactional data to identify risks and opportunities. Models capture relationships among many factors to allow assessment of risk or potential associated with a particular set of conditions, guiding decision-making for candidate transactions.
The defining functional effect of these technical approaches is that predictive analytics provides a predictive score (probability) for each individual (customer, employee, healthcare patient vehicle, component, machine, or another organizational unit) to determine, inform, or influence organizational processes that pertain across large numbers of individuals, such as in marketing, credit risk assessment, fraud detection, manufacturing, healthcare, and government operations including law enforcement.
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Predictive analytics is used in actuarial science, marketing, financial services, sports/fantasy sports, insurance, telecommunications, retail, travel, mobility, healthcare, child protection, pharmaceuticals, capacity planning, social networking, and other fields.
One of the best-known applications is credit scoring, which is used throughout financial services. Scoring models process a customer’s credit history, loan application, customer data, etc., to rank-order individuals by their likelihood of making future credit payments on time.
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