Digital tech key to serving customers better: Axis Bank

US President Barack Obama's re-election campaign used data analytics to mine insights that went on to form the basis of a lot of the campaign's initiatives from fund raising to voter contact. None of this is news to marketers who use data analytics with different degrees of sophistication on a daily basis.

On Storyboard, we discuss how digital technology is transforming the marketing function. Manisha Lath Gupta, Chief Marketing Officer of Axis Bank tells CNBC-TV18 how India's third largest private sector bank and the banking industry uses digital technology to build brands, market share and ultimately, profitability. Here is the edited transcript of the interview on CNBC-TV18. Q: Data analytics is not something unusual to marketers and definitely not to you, is it?
A: Absolutely. This is something that we use a lot and this is one of the key things which help us to serve our customers better. Q: At a bank and in the banking industry I am guessing data collection is not a problem because technology is the backbone or the spine on which the service runs. What is the challenge and is how do you use it?
A: I would say data collection is not a challenge from a transaction point of view but, often demographic data or just getting to know your customers better from a demographic point of view is a little bit of a challenge because the more questions you ask at the time of account opening the longer the process becomes. We are constantly striving to know more about our customers from the non-financial space because that helps us to take better decisions and do better targeting.
The challenge on the transactional data collection is that it actually is lined in various systems across the bank. When you have to mine it, you need to make huge number of systems, talk to each other or give the data to a central depository where we could mine it and understand behaviours of the customer. Q: When we say data analytics, give me a sense of how often it is used, what is it being used for, does it just used in advertising communication or is it actually creating products, product development. How does it work?
A: Today, I think I can say that data analytics is the backbone of a lot of the activities that happen around the bank. Any business issue or objective that we are trying to meet starts off by understanding the data around it.
Let me illustrate with a couple of examples. Suppose you are facing a business problem of depletion, you are finding that your accounts are getting depleted. Then the first thing that you would want to understand is that who are these customers who are depleting it.
From that point onwards, data analytics kicks in because you start analysing your database, you slice and dice to understand what exactly is the segment which seems to be depleting. You will narrow down to a smaller group, which might be some set of people with - for example, a salary product in a tier two city and in the age group of 25 to 35 years. Now, that makes the job far more actionable rather than just having general information that accounts are depleting.
When we know this information, we couple data analytics with a little bit of insight by meeting these customers and understanding what exactly the issues may be. It maybe formulating a few hypothesis based on those triggers and barriers and it could also be that they are not familiar with our digital channels or they have changed address but, didn’t move their bank accounts to the neighbourhood or maybe they are having some customer service related issues.
It could be anything and you then start communicating and talking to them around those smaller insights and topics. In this way, you can actually engage with customers and try to address the business problem and welcome them back into your fold.
_PAGEBREAK_ Q: Who does this for you, does the data analytics team sit within the marketing function or is it a separate team. How does it work?
A: It is a separate team. It is called the business intelligence unit (BIU) and they are a large set of very talented people who analyse the data, not just for marketing campaigns but, for a lot of other decisions within the bank. For example, it is used for determining which customers are more risky than the others and it is a analytics based decision which they would be doing.
It’s a strong cross functional team effort. I think it starts from IT enabling to feed as data and BIU is helping us to cut and slice the data into something which becomes meaningful and actionable. Q: As the marketing head would you be influencing IT spends also because you are consuming so much of the analytical work that is happening and which is then using technology?
A: I think to some extent marketing or even BIU would influence IT spends. IT will spend where business needs the money to be spent. Yes, we do influence IT spends but they are the guys who understand technology the best. We can say we want an ‘x’ capability but, they will decide whether one is the right vendor or not and what is the right hardware and what is the right infrastructure. That’s the call that IT takes. Q: What about social media and therefore digital marketing? How is it linked to data analytics and are they linked directly?
A: In an ideal world they should be linked. At the moment it’s not linked but social media helps you to get a lot of other profiling for your customers which we actually do not know. So in an ideal world yes, it should converge, but at the moment it isn’t like that.
 
Q: You have a lot of fans on your Facebook page. How do you evaluate social media and one on one communication which is what social media is about? How do you evaluate whether that’s effective and what is it offering in terms of opportunities?
A: At the moment we evaluate it on the basis of engagement. A lot of people who are on our social media page are not necessarily our customers. We are actually treating it as a brand building and advocacy platform where we can get people to talk about their experiences or can influence their impression about the bank.
The beauty of analytics based marketing is that you can preempt and understand what the customer needs as the next best product or service through propensity modeling and analytics. This is when a sales call actually starts sounding like a service call. When the customer says how they know that I was looking to change my car. Q: Give me an instance where Axis Bank did something based on a very sharp insight that came out of analytics and then became an action plan?
A: Any big organization or a big bank would be running hundreds and thousands of such campaigns on an ongoing basis. So, that amount of work goes behind analytics based marketing. Q: Does these become the big glamorous, big budget media spend campaigns?
A: They do not, but they are the ones that work beneath and drive traffic, create leads, result in sales, result in better service, deepening of relationship and all the stuff actually happens beneath the surface but, it is very powerful. You can actually see its impact within a month or two and have test and control tests. You can tell these are the people whom we spoke to and behaved in a certain way and the others whom we didn’t. You know the impact of your efforts there.
 
A few months ago we launched a happy ending home loan which said that we will waive off the last 12 EMIs and is basically an analytic product that does analysis and you find that even if you waive off the last 12 EMIs. A customer who spends 20 years with you paying back your loan is going to be a profitable customer. Q: So clearly it's an opportunity. Is this being used optimally now?
A: I think everybody understands its importance and power. The challenges that come into place are always the capability, infrastructure, ability to collate the data from all sources and most importantly the ability to contact the customer again. Therefore, contact ability becomes very important. I may know everything about you but, if I do not know a way to reach you, then it’s of no use. I need to know your mobile number, email address, probably your Facebook login and your Twitter account because all these are channels for me to communicate with you.