Data Mining and Financial Data examination
Most marketers understand the value of collecting financial data, but also realize the challenges of leveraging this knowledge to create intelligent, proactive pathways back to the customer. Data mining – technologies and techniques for recognizing and tracking patterns within data – helps businesses sift by layers of seemingly unrelated data for meaningful relationships, where they can anticipate, instead of simply react to, customer needs in addition as financial need. In this easy to reach introduction, we provides a business and technological overview of data mining and outlines how, along with sound business processes and complementary technologies, data mining can reinforce and redefine for financial examination.
1. The main objective of mining techniques is to discuss how customized data mining tools should be developed for financial data examination.
2. Usage pattern, in terms of the purpose can be categories as per the need for financial examination.
3. Develop a tool for financial examination by data mining techniques.
Data mining is the procedure for extracting or mining knowledge for the large quantity of data or we can say data mining is “knowledge mining for data” or also we can say Knowledge Discovery in Database (KDD). method data mining is : data collection , database creation, data management, data examination and understanding.
There are some steps in the time of action of knowledge discovery in database, such as
1. Data cleaning. (To remove nose and inconsistent data)
2. Data integration. (Where multiple data source may be combined.)
3. Data selection. (Where data applicable to the examination task are retrieved from the database.)
4. Data transformation. (Where data are transformed or consolidated into forms appropriate for mining by performing summary or aggregation operations, for example)
5. Data mining. (An basic course of action where intelligent methods are applied in order to extract data patterns.)
6. Pattern evaluation. (To clarify the truly interesting patterns representing knowledge based on some interesting measures.)
7. Knowledge presentation.(Where visualization and knowledge representation techniques are used to present the mined knowledge to the user.)
A data warehouse is a repository of information collected from multiple supplies, stored under a unified schema and which usually resides at a single site.
Most of the edges and financial institutions offer a wide verity of banking sets such as checking, savings, business and individual customer transactions, credit and investment sets like mutual funds etc. Some also offer insurance sets and stock investment sets.
There are different types of examination obtainable, but in this case we want to give one examination known as “Evolution examination”.
Data evolution examination is used for the object whose behavior changes over time. Although this may include characterization, discrimination, association, classification, or gathering of time related data, method we can say this evolution examination is done by the time series data examination, ordern or periodicity pattern matching and similarity based data examination.
Data collect from banking and financial sectors are often comparatively complete, reliable and high quality, which gives the facility for examination and data mining. Here we discuss few situations such as,
Eg, 1. Suppose we have stock market data of the last few years obtainable. And we would like to invest in shares of best companies. A data mining study of stock exchange data may clarify stock evolution regularities for overall stocks and for the stocks of particular companies. Such regularities may help predict future trends in stock market prices, contributing our decision making regarding stock investments.
Eg, 2. One may like to view the debt and revenue change by month, by vicinity and by other factors along with minimum, maximum, total, average, and other statistical information. Data ware houses, give the facility for comparative examination and outlier examination all are play important roles in financial data examination and mining.
Eg, 3. Loan payment prediction and customer credit examination are basic to the business of the bank. There are many factors can strongly influence loan payment performance and customer credit rating. Data mining may help clarify important factors and eliminate irrelevant one.
Factors related to the risk of loan payments like term of the loan, debt ratio, payment to income ratio, credit history and many more. The edges than decide whose profile shows comparatively low risks according to the basic factor examination.
We can perform the task faster and create a more complex presentation with financial examination software. These products condense complicate data analyses into easy-to-understand graphic presentations. And there’s a bonus: Such software can vault our practice to a more progressive business consulting level and help we attract new clients.
To help us find a program that best fits our needs-and our budget-we examined some of the leading packages that represent, by vendors’ estimates, more than 90% of the market. Although all the packages are marketed as financial examination software, they don’t all perform every function needed for complete-spectrum analyses. It should allow us to provide a rare service to clients.
ACCPAC CFO (Comprehensive Financial Optimizer) is designed for small and medium-size enterprises and can help make business-planning decisions by modeling the impact of various options. This is achieved by demonstrating the what-if outcomes of small changes. A roll forward characterize prepares budgets or forecast reports in minutes. The program also generates a financial scorecard of meaningful financial information and indicators.
Customized Financial examination by BizBench provides financial benchmarking to determine how a company compares to others in its industry by using the Risk Management Association (RMA) database. It also highlights meaningful ratios that need improvement and year-to-year trend examination. A rare function, Back Calculation, calculates the profit targets or the appropriate asset base to sustain existing sales and profitability. Its DuPont form examination demonstrates how each ratio affects return on equity.
Financial examination CS reviews and compares a client’s financial position with business peers or industry standards. It also can compare multiple locations of a single business to determine which are most profitable. Users who subscribe to the RMA option can integrate with Financial examination CS, which then lets them provide aggregated financial indicators of peers or industry standards, showing clients how their businesses compare.
iLumen regularly collects a client’s financial information to provide current examination. It also provides benchmarking information, comparing the client’s financial performance with industry peers. The system is Web-based and can monitor a client’s performance on a monthly, quarterly and annual basis. The network can upload a trial balance file directly from any accounting software program and provide charts, graphs and ratios that demonstrate a company’s performance for the period. examination tools are viewed by customized dashboards.
PlanGuru by New Horizon Technologies can generate client-ready integrated balance sheets, income statements and cash-flow statements. The program includes tools for analyzing data, making projections, forecasting and budgeting. It also supports multiple resulting scenarios. The system can calculate up to 21 financial ratios in addition as the breakeven point. PlanGuru uses a spreadsheet-style interface and wizards that guide users by data entry. It can import from Excel, QuickBooks, Peachtree and plain text files. It comes in specialized and consultant editions. An add-on, called the Business Analyzer, calculates benchmarks.
ProfitCents by Sageworks is Web-based, so it requires no software or updates. It integrates with QuickBooks, CCH, Caseware, Creative Solutions and Best Software applications. It also provides a wide variety of businesses analyses for nonprofits and only proprietorships. The company offers free consulting, training and customer sustain. It’s also obtainable in Spanish.
ProfitSystem fx Profit Driver by CCH Tax and Accounting provides a wide range of financial diagnostics and analytics. It provides data in spreadsheet form and can calculate benchmarking against industry standards. The program can track up to 40 periods.