The face of banking industry has changed tremendously over the years, predominantly after 2008’s economic crisis. Cost of compliance, regulatory reforms and risk management needs careful attention for simplifying business functions. Modernised tools for getting intelligent understanding on key business areas are much-needed.
But, no matter how much it is streamlined, the banking industry will still be bumping into an information overload. Though it continues to accumulate large chunks of data, it has been lagging to get accurate and high-value insights on the business. Considering the advancement in analytics and how well-equipped software are installing technologies like predictive analysis and cloud, the positive changes in the banking sector are definite.
Banks must adopt analytics solutions that can help them in taking sound business decisions, become more compliant, drive innovation and uncover other hidden capabilities. The percentage of banks who have already invested in big data and analytics is 68%, however, 65% of them are yet to start availing their benefits.
Though the concept of business intelligence (BI) in banking isn’t new, the complete potential of its applications still needs to be explored. Today, these solutions come with immense scope and the reason for it is the ever-changing customer demands and the regulatory compliances. Banking analytics solutions are the crucial to can promise overall growth in the organisation, thus utilising the data library in the best possible way.
Banks implement analytics and BI solutions for numerous purposes. Primarily, the top three reasons being reporting (35%), cost reduction (32%) and better risk management (29%). Have a look on these stats highlighting what banks’ have to say.
Indian Banks and Analytics
Banks in India have been using analytics as a lucrative technology to avail the advantages such as attracting new customers, retaining existing ones, maximising gains and eliminating costly, time-consuming and redundant processes. Discussed under are stories of reputed banks who’ve been practicing this trend.
- SBI integrates analytics with social media
As on 2015, the banking giant SBI employed 16 economists and statisticians to structure 60+ models that will help them decide on lending loans (education, housing, SME loans etc.), setting up branches/ATMs, launching new schemes and more. For this, these professionals will be studying over 120 TB of SBI’s data, identifying trends and then using the power of social media to contact their customers directly.
The process was explained by ET through an example in one of their articles like – While Rohit was congratulated by friends, family and colleagues on his recent promotion, he also received acknowledgement from SBI on his achievements along with a reminder to pay off his education loan.
- ICICI uses analytics and BI in debt recovery
Banks continuously have to deal with issues like liquidity and changes in interest rates every now and then. However, they must ensure that no matter what, the customers remain satisfied. One of the areas of concern is Debt Recovery which requires the bank to recover loans and yet retain their customers.
ICICI realised that they must follow a friendly approach for recovering debts. They deployed a ‘centralized debtors’ allocation model’ to deal with high-risk and low-risk delinquencies through non-intrusive modes like SMS, IVR, reminder calls or personal visits. The SAS BI technology enables the bank to choose the right platform specific to each delinquency and make the processes proficient.
- HDFC practices analytics to understand consumer behaviour
HDFC bank was one of the foremost players in the sector who invested in banking analytics back in year 2004-2006. They used the technology in setting up data warehouses to manage their repository of unstructured data. With this, they could better learn the financial habits of the customers, their spending patterns, areas of expenditure etc. Based on these statistics, they can promote need-based offers which benefits customers and ultimately add to the bank’s revenue.
This also aided the bank in maintaining credit histories, identify doubtful activities, increase in number of new account openings in a day/month, amount of cash deposits in a day etc.
In the end, big data and analytics in banking is the future, however, there is a long way until it catches full pace in India. But, it is certain that those exploiting this technology will be identified as leaders in the banking industry.
If you too are in search of analytics and business intelligence solutions for your bank, request a quote today from us at Sesame India. We’re happy to help!