Predictive analytics forecasts probable outcomes based on historical patterns. Prescriptive analytics goes further by recommending optimal actions derived from those forecasts.
Sector Examples
| Sector | Predictive | Prescriptive |
|---|---|---|
| Banking | Delinquency probability | Loan restructuring strategy |
| Insurance | Expected loss ratio | Dynamic pricing adjustment |
| Wealth | Portfolio risk drift | Automated rebalancing |
Predictive informs; prescriptive decides. Governance complexity increases materially at the prescriptive stage.
References: – Harvard Business Review, Competing on Analytics – Gartner, Analytics Ascendancy Model