By: Rishi Aurora, MD, Accenture’s financial services group in India
Banks today are faced with a deluge of data that they receive and generate every day: data on risks associated with the market, liquidity and credit, as well as customer details generated through various channels like websites, mobile phones, social media, Automatic Teller Machines (ATMs) and Point of Sale (PoS) terminals.
Today, the voluminous amount of data is just a pile of numbers. But banks could transform data into useful knowledge if they have a clear strategy to capture, process and analyse those numbers. That creates a huge opportunity for them to acquire new customers and retain existing ones, develop new businesses and create new products, getting a big boost in sales and their bottom line.
Put simply, in today’s digital world, that mountain of data is key to unlocking a mountain of potential profits. But because data is coming from various sources, it can be fragmented and lacking standards. That means often it can’t be used to generate the insights needed to better engage with customers. Because of that, integrating unstructured and structured data from external and internal sources becomes critical to achieve a better understanding of customers and new business leads.
The use of “big data” and other new technologies to drive business may seem something futuristic, but many financial firms are already applying it now, offering a window into the potential benefits.
A recent Accenture survey of companies that have implemented big data projects around the world showed the vast majority of respondents, 83%, see it as a competitive edge to remain relevant in the digital economy and nine in ten respondents plan to increase their data-science expertise in the near future.
In India, the recent success of popular mobile wallet companies is an excellent example of the systematic use of customer data. Banks can draw inspiration from nimble start-ups armed with efficient data handling strategies for targeted customer acquisition and retention. A greater attention to customer data management and analytics is essential to identify and target customers and offer them tailor-made products and services.
The ability to generate real-time insights is also indispensable in the current scenario where customers with fickle and constantly changing behavior want instant results and instant gratification.
Banks using integrated information management systems that capture data in real time can use it for personalization that delivers hyper-relevant contextual advice, products and services based on geo-location, search results and social media— when customers or prospects most need them.
Customers today complain about banks not understanding their needs. Real time data access and analysis will enable banks to take a more proactive approach to address those concerns. Establishing a central data repository that updates in real time is crucial and armed with the analytics from that information, a bank’s marketing team can run targeted campaigns that could bring down costs significantly.
The emphasis on big data also means banks will have to focus more on upgrades and investments in leading-edge technology to process, analyse and transmit all that information. Big data will demand big pipes and systems beyond what’s currently in place.
Data is the currency of the new economy and as the digital economy grows and changes the face of banking, new business models will evolve. Data management is therefore critical to achieve a competitive advantage and ensure that banks remain relevant in the digital age.