How about if your able to predict what will happen in future? What an amazing idea it is! Moreover, what if you can see the future and change the present situation to get improved outcome in future? If you are a business person, you will need this magical ability to forecast the business scenarios and situations. For earning good amount of profit, you will surely use this magical wand. You must be wondering that Why am I talking about this? What exactly I want to say? Well sure without eating your time, let me tell you that you can have this magical wand with you in today’s data science world. The activation method for this magical wand is predictive analytics.
What exactly predictive analytics is?
As per the Wikipedia’s definition,” Predictive analytics is an area of data mining that deals with extracting information from data and using it to predict trends and behavior patterns”. Predictive analytics consists of various statistical methods from predictive modeling, machine learning, and data mining that analyze present and past truths to make estimates related to imminent incidents or otherwise unknown events. In other words, Predictive analytics uses data, statistical algorithms and machine learning methods to recognize the probability of future consequences based on past data. The aim is to go beyond knowing what has materialized to giving a finest calculation of what will occur in the forthcoming time. In case of commercial applications, predictive models make full use of and extract benefits from patterns originated from past and transactional data to recognize hazards and opportunities. Models seizure relationships among numerous issues to let calculation of threats or opportunities related with a specific condition, controlling decision making for candidate transactions.
Nowadays various industries such as Retail, banking and financial services, Healthcare, marketing, Oil and gas, manufacturing, government and public sector, capacity planning, child protection are using predictive analytics to detect and reduce frauds, measure risks and many more purposes. Most popular application is of course in financial services i.e. credit card fraud detection and credit scoring (process customer’s past credit data, loan payments and transaction history predict chances of future credit payments).
Note that predictive analytics is a methodological system, that can be implemented by Statistical (mainly regression), machine learning and several analytics techniques.
Open source tools that can be used for predictive analytics are:
4.Weka and many more
So, what are you waiting for? choose your tool and start analysing.. welcome to the future..:)