In my previous blog, I mentioned data mining as an important trend in information systems. Throughout the course of this blog, I will give a more in-depth explanation of data mining and also describe its advantages and disadvantages.
Data mining can be defined as the ‘the science of extracting useful knowledge from huge data repositories’ (http://www.sigkdd.org/curriculum.php). Data mining uses statistical tools to reveal patterns, trends and relationships that would otherwise go undetected. By carefully analysing these patterns, businesses can develop new advertising campaigns or make predictions about how well a product will sell. Data mining is used frequently in industries such as banking, engineering and government. It is also known as Knowledge Discovery in Data (KDD).
Data mining is useful to financial institutions in many ways. By analysing patterns in their customers banking data, banks and other financial institutions can help determine who is suitable for a loan and who is not. It also offers protection to customers by detecting fraudulent credit card transactions.
Data mining can be used to detect faulty manufacturing equipment and machines. It also helps to determine optimal control parameters. The parameters help manufacturers develop products of high quality.
1) Privacy Issues
People are becoming more concerned with how much of their personal information is collected and how it is used. Social media, such as Facebook, forums and blogs have led to increased concerns among the population that if their information was to get into the wrong hands it could cause people trouble.
2) Security Issues
Firms have a lot of information about their employees and customers, examples include social security numbers, pay details, etc… If hackers break into the business files they could steal this information and misuse it for their own benefit.
For more information about the advantages and disadvantages of data mining click into the following link: http://www.zentut.com/data-mining/advantages-and-disadvantages-of-data-mining/