Data mining is a useful way to gain a competitive advantage and discover valuable information that would otherwise go undetected.
In general, our data mining process involves the following:
- Understanding business goals
- Reviewing available data
- Retrieving, preparing and modeling data
- Evaluating data and discovery (ie detecting outliers/anomalies/deviations, identifying relationships of variables, etc.)
- Validating results
- Interpreting and summarizing results in terms of business goals.
With discoveries from a data mining program risk managers can more effectively allocate their resources to meet business goals.
WHAT IS DATA MINING?
Data mining is the process of extracting previously unknown and potentially useful information from data. By implementing a data mining program, risk managers can uncover hidden patterns in large data sets.