Predictive analytics, often referred to as data mining, differs from traditional BI applications, in which the business user must already have some idea what he or she is looking for.
Predictive analytics is data-driven, rather than user-driven, so it can discover rules or relationships amongst the data that could not be found via traditional means.
For example, predictive analytics can answer questions such as the following:
- What are the characteristics of my high-value customers?
- How can I detect opportunities for cross-selling and up-selling?
- Which of my customers are likely to leave?
- What is the right insurance quote for this customer?
- When one part fails, what other parts may fail soon?
- What is the likelihood of a part failure?
- Are there data patterns that are an indicator of fraud?