Analytics helps us not only see but also live the bigger picture, says Bala Parthasarathy, CEO & Co-founder of MoneyTap.
Technology plays a stellar role in fintech. Using analytics to extend their services to a previously unbankable set of customers has been one of the main reasons behind the growth that MoneyTap has seen since its inception. Bala Parthasarathy, CEO & Co-founder of MoneyTap, shares insights on how analytics helped them drive innovation in the financial sector.
"By using analytics to study the repayment behavior and credit history of customers, we know that it is safe to lend to them. This insight lets us disburse loans to a larger segment of people that have previously not been served by the traditional financial organizations," says Parthasarathy.
Because of their policies, banks don't lend to certain segments of people. “Analytics helps us determine the creditworthiness of these people and offer them loans and other services which they otherwise won't get anywhere else,” he adds.
It is useful for the lender to see if the customer genuinely needs the service or is just checking it out. How fast the person is going through the steps and how many corrections are made help institutions add customers to processing queues of different priorities. Analytics can also be used to reach out to those customers who couldn’t qualify previously for various reasons. The profiles of these customers would most likely have undergone some changes with time. “Based on their similarity to customers who have recently qualified, we can approach previously rejected customers and serve them,” highlights Parthasarathy.
Analytics also helps the company in bringing down the turn-around-time for customers with similar profiles. For satisfying various compliance norms like KYC and address verification, institutions can use location analytics and OCR to cross-verify the documents submitted as proof, minimizing (and sometimes even eliminating) the manual work and hence reducing the time taken to disburse loans.
Analyzing historical data, fintechs get to access and assess the usage patterns of their users. Using extensive time series data that stores events in a customer’s journey, systems can identify where customers are spending more time and whether it has an impact on the customer’s usage of products, to continually tweak the user experience making it more and more intuitive and delivering the right product to the right set of people.
Sometimes, customers leave their profiles incomplete because of reasons such as they don't have their documents handy, weak internet connection, or any other issues. Analytics provides us the intelligence to drive more effective reminders by helping us identify when and how to prompt the customers who have not yet completed their application to go ahead and get their credit line.
Another area where analytics plays a key role is in detecting fraud. Given the sensitive nature of the information, fraud detection is pivotal when it comes to fintech. Based on usage patterns such as the time of the day, city/area of the user, number of attempts, number of invalid data entries, etc., systems can quickly identify if fraudulent access or usage is being attempted and then throttle the traffic accordingly.
One lesser used area in analytics that is getting increasingly popular is anomaly detection, says Parthasarathy. When certain usage patterns change, discounting the seasonality (for example, an increase in spends during Diwali), algorithms that monitor analytics metrics can easily identify anomalies. It is particularly useful in discovering trends and deviations.
Apart from the above points, analytics also helps companies drive their marketing efforts. Consumers who look for different financial services like loans, investments, payments, etc. are often online. This gives institutions a platform to reach out to customers by publishing online advertisements related to what people search for or people with similar profiles are interested in. Being consumers of one or the other service, we all experience the power of analytics. For example, when you look up a particular product online, you start seeing ads of similar products and services around you. It's analytics doing its job, he adds.
“As a financial institution, analytics helps us understand a lot of things about our customers - whether they are actually in need of money, do they have the intent and ability to pay back, are they looking for other loan options, etc. It helps us cut down on risk,” says Parthasarathy.“Long story short, analytics helps us not only see but also live the bigger picture. Studying the present day scenario and deciding future goals are both impossible without analytics. We are constantly looking at ways we can use analytics to improve our services and reach out to more customers,” he sums up.