This Advantages and Disadvantages of Data Mining, Knowledge Finder Path

Data mining is an important part of the knowledge discovery process so we can analyze large data sets and gain hidden and useful knowledge. Data mining is effectively implemented not only in the business environment but also in other areas such as weather forecasts, medicines, transportation, health care, insurance, government etc. Data mining has many advantages when using in a particular industry. In addition to these advantages, data mining also has its own weaknesses eg, privacy, security and misuse of information. On this occasion, we will discuss the advantages and disadvantages of data mining in some industries.

Advantages of Data Mining

In the field of Marketing / Retail

Data mining helps marketing companies build models based on historical data to predict who will respond to new marketing campaigns such as direct mail, online marketing campaigns etc. Through these results, marketers will have the right approach to selling profitable products to target customers.

Data mining brings many benefits to retail companies in the same way as marketing. Through the analysis of groceries, a store can arrange the product so that consumers can buy several products that are often purchased simultaneously but fun. In addition, it also helps retail companies offer certain discounts for certain products that will attract more customers.

Finance / Banking

Data mining provides financial institution information about loan information and credit reporting. By building models from historical customer data, banks, and financial institutions can determine good and bad loans. In addition, data mining helps banks detect fraudulent credit card transactions to protect credit card owners.

Factory / Manufacturing

By applying data mining in operational engineering data, manufacturers can detect the wrong equipment and determine the optimal control parameters. For example, car manufacturers have the challenge that even the conditions of manufacturing environments in different car production plants are actually the same, the quality of the cars should not be different from each other, but maybe in one batch / lot there is a defect that is not known why. Data mining has been applied to determine the range of control parameters that lead to good car production. Then the optimal control parameters are used to manufacture the car with the desired quality.

Government
Data mining helps government agencies by digging and analyzing financial transaction records to build patterns that can detect money laundering or other criminal offenses.

Data Mining Losses

Privacy Issues

Concerns about personal privacy have risen tremendously recently especially as the internet is growing rapidly with social networks, e-commerce, forums, blogs. Due to privacy concerns, people are afraid of their personal information being gathered and used in unethical ways that have the potential to cause them many problems. Businesses collect information about their customers in many ways to understand their buying behavior trends. But businesses do not last forever, some days they may be acquired by others or lost. At this time, the personal information they have may be sold to another or leaked.

Security Issues

Security is a big deal. Businesses have information about employees and their customers including social security numbers, birthdays, salaries and more. However, how well this information is considered is still in question. There are many cases that hackers access and steal large customer data from big companies like Ford Motor Credit Company, Sony with so much personal and financial information available, stolen credit cards and identity theft are a big deal.

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