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Last Updated : Jul 18, 2019 06:44 PM IST | Source:

Treating data right

Availability of huge data sets allows banks to better leverage analytics.

Moneycontrol Contributor @moneycontrolcom

The Indian financial services sector is flush with data. In some cases, it is a surfeit of unstructured data which could be a gold mine if structured properly.

With tools that allow insightful structuring of the available data that can enable extremely useful insights, banks are at great advantage today. Being the early adopters of digital technologies and tools, and more so in their customer facing applications and systems, they are now reaping benefits.

In this sector, the biggest advantage data can provide is about customer insights, but fraud detection is not far behind in terms of valuable insights. As Sajit Vijayakumar, Senior Vice President and Chief Operating Officer, Infosys Finacle says, “In an age of pervasive digitization, insights are the most valuable resource for a bank. Banks are using data and intelligence to develop targeted products or originate new product and service propositions. With collaboration between banks, fintech, and technology vendors on the rise, we see banks working jointly with their ecosystem partners to use these insights and deliver personalized products and services to customers.”

While the uses of a smart data analytics system can be extremely wide and varied- some of which are not even envisaged as yet, there are clearly some specific instances of analytics driving outcomes across the following four key aspects of banking:

  1. Customer experience – segment of one, truly contextual banking, targeted cross-sell and upsell, personalized promotions. The power of analytics comes forth when the insights from these data points are used for market strategies, driving better marketing.

  2. Fraud and risk management- with the support of Machine learning, the data derived from analytics can actually create predictions for fraud and security risks. Timely adherence to policies of application for security can prevent fraud to huge amounts. In addition, McKinsey analysts say that analytics-aided techniques, such as digital credit assessment, advanced early-warning systems, next-generation stress testing, and credit-collection analytics can help banks lower their risk.

  3. Identifying opportunities for revenue expansion (for example, banks are doing social scans to identify unhappy customers of other banks). This could mean identifying completely new business streams- like sharing customer-analytics capabilities with telecom companies or retail brands- who can use the data for their industry insights. This could also include other B2B or B2C businesses as well. And its not just about great analytics tools but also about finding the sweet spot- more revenue, better business.

  4. Optimizing operations to reduce costs, mostly by digitization of the bank’s services. For customers, the new information could help provide Self-service/DIY or advantage of personalized service while for the internal processes it would be about better teller cash management, branch capacity planning, portfolio and assets risk, channel profitability.

And final, the most critical ingredient – setting the aspiration on use of analytics throughout the organisation. When the focus is on establishing and leveraging analytics as a business discipline—for all decision makers across the bank, benefits flow across processes. In fact, the deployment of analytics tools should be like the nervous system in the human body. It should be receptive to the expectations form every bit of data collated- every single part of the company needs to be working on the same premise.

However, collation of data is not enough. Intelligent insights can be derived only from structured data that is worked with very smart analytics tools. This could finally be the biggest differentiator a bank has, in terms of digital readiness.

“The ability to quickly capture and convert data in near or real-time into actionable insights will be key to a bank’s success,” Sajit concludes.

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First Published on Jul 18, 2019 06:44 pm
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