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:

Banking Frontiers - - Conference Highlights - Manoj@bank­ingfron­tiers.com

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

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