ANALYTICS IN FINANCIAL SERVICES
Banking Frontiers, in association with Equifax, organized a conference on the use of analytics in the BFSI sector. Highlights of the deliberations:
Samith Radhakrishnan: The role of analytics mainly depends on how you have structured analytics in your organization. At Axis Bank, we get good support from the management for implementing analytics in various departments. I feel the management needs to get involved in decision making process regarding analytics. In 2010, we started using analytics for credit cards and slowly we have started using it in other businesses like retail, liability and investment products. Axis Bank is largely a score driven bank; we have scorecards, collection portfolios and customer management system.
Organizations need to talk with the management with numbers and should invite them to participate in decisions
related to analytics. Analytics is not for an individual department, it can be used by all departments. It helps in augmenting creativity for the marketer and focused marketing can be done with the help of analytics. We are a pioneer in using analytics for retail lending - we use analytics for our small business portfolio and multifunctional business purposes. Analytics is also used in marketing, distribution, operations and human resource management.
N Rajendran: At NPCI, we evaluate all the parameters of the customer transactions like history, pattern and digital devices used by the customers for the transactions. We use analytics to create customer experience, business, decision making, to detect frauds, ascertain service availabilities and understand customer graveness.
Sunder Krishnan: There is around `200 billion worth of frauds happening in the insurance industry of India. We have hired an analytics team and we are using SAS software for investigating parameters like customer location, age and occupation. Reliance Life Insurance has invested `50-60 lakh on analytics and we are saving `30-40 crore on account of efficient use of analytics.
Sachin Seth: How are organizations using analytics to provide efficient customer services?
Pankaj Pandey: We at IDBI Federal General Insurance see customers as a group and do segmentation and analytics helps us in treating every customer as an individual. So, when a sales person approaches the customer, he knows what are the needs of the customer. Analytics helps him in understanding the relationship with the customer. The sales person becomes more equipped with information in effectively interacting with the customer.
Shekhar Srivastava: In State Bank of India, we use proactive risk management software to understand customer transaction patterns. CRM software helps the customers to understand about frauds as we upon detection of a possible fraud, inform the customer. This is done using analytics. SBI also use analytics when merging two branches using data pertain to location, footfalls and customer profiles.
Sachin Seth: What is the role of analytics in customer data management?
Kunjal Prasad: State Bank of India sees some 40,000 crore transactions in a day and we have around 50 crore customers. In 2008-09 we have created our own data warehouse; there are 42-50 data sources within the bank. We had faced the problem of integration of the data. We have taken up ‘Project Ganga’ to rectify the gaps in the data. We have 550 TB data, so in the coming months we will be creating a big data lake to store the data. The cost of keeping the data in warehouse is also very high, so we are using a hybrid technology to store the data. We are using CRM with analytics to provide excellent service to our customers.
Lalitha Bhatia: IDBI Federal Life Insurance mainly depends on banks and agents for customer data. The biggest challenge for any insurance company is accurate data, clean data and complete data. Insurance companies take the help of the external agencies to update the data. We store the data in our data center that maintains all the privacy and security in a very controlled environment.
Suresh A. Shanmugam: We have information collected over 2 decades about our customers. We get the live data from our field sales executives about the current weather conditions, which helps us to measure the demand for our products like tractor loan and loan for other farming purposes.
Sachin Seth: How is analytics useful in
maintaining business ecosystem?
Anand Sundaram: I believe, there is a need for creating an ecosystem for using analytics in an organization. At YES Bank, analytics helps our on-field executives for credit card sales. Through SMSs, field executives get the information about a particular customer and whether the case can be a login or not. Analytics also helps relationship managers in wealth management and insurance business.
Jaya Janardanan: We at Aditya Birla Idea Payments Bank make use of analytics to understand the behavior patterns and transactions of the customers. Our main target is to connect with the larger customer base in locations where banking has not reached. We also provide other services like ticketing and hotel booking to our customers. We are trying to reduce frauds. Our traditional underwriting was manual, then it was moved to a scorecard and now we are moving to AI. Human touch needs to be there in insurance and you cannot use chatbots or robots to solve certain customer queries. However, repetitive queries can be answered using AI.
Sachin Seth: What is the future of analytics in BFSI sector in India?
To sum up, I find the panelists are agreed on the fact that there will be brighter future for use of analytics in the BFSI sector. The external data helps BFSI institutions to understand the behavior pattern of the customers. These entities are working on models that will help them in analyzing behavior pattern of the customers to reduce frauds, and to provide good customer experience.
Panelists discussing a core point
Participants in the unconference