Analytics Can Help Banks Tackle Customer Service Woes

PA Kalyanasundar – Rtd GM –IT Bank of India and Advisor, Ramco Systems elaborates on data analytics adoption among Indian banks. In a one-on-one discussion with Biztech2.com, he cites the advantages of adopting analytics for effective business management.

What is the adoption level of analytics in the Indian banking sector?

The last decade went by building core banking - by public and private banks alike. Now that core banking has made it on the anvil of many banks, analytics is seeing much higher rate of adoption. Most of the top managers have realised that effective usage of data will help in on-time decision making. Analysing trends and customer requirements will help banks to gauge their customer and pitch relevant business opportunity.

Along with analytics, data warehouses can be built. The data which gets collected and deposited at the repository can be used for the purpose of decision making and Customer Relationship Management. Analytics helps ‘on-time’ decision making and also improves grass root level management. For instance, Bank of India has already implemented data analytics and uses it to generate reports.

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Which are the business functions where banks can effectively apply analytics?

Earlier, the basic business functions of any bank were money deposit and lending .Today, banks operate multiple businesses like investments, cards (debit & credit), wealth management and so on.

When there are multiple functionalities, the processes also become equally complex. Analytics can be used in areas such as deposits, card and credit transactions and treasury. There is a lot of data which is generated in these functions and with the use of analytics, one can generate leads, pull reports, assimilate data and mark new customer trends.

How can analytics help banks tackle customer service issues? What percentage of IT budget should be allocated to analytics?

Analytics contain tools which help banks analyse customer expectations and requirements. Apart from the above mentioned advantages, analytics are used to design products and services which can be tailor-made for customers. Using analytics before rolling out new policies and offers is the current trend that is observed with both public and private banks.

When it comes to investment, analytics does not require a huge share since most of it will go in setting up data warehousing. The software which is used for mining can take care of analytics as well.

What role does analytics play from a regulatory stand-point for the Indian banks?

With reference to India, RBI states that along with core banking, if data warehousing and analytics is in place, sourcing information from banks becomes easier and more regulated. The usual procedure for all Indian banks is that they need to submit their reports and statements in a pre-defined format .With data analytics tools, automated data flow to regulator can be facilitated and RBI can retrieve information from any bank instantly. The prescribed regulatory requirement can be taken care of by implementing these tools.

Can you cite the key business benefits that banks can accrue from analytics?

The main benefit is the access to current and up-to-date data. Reports pulled from this data contain accurate information. The management can base their decisions on real-time data rather than old statistics. Having legacy data is hazardous to any company’s financial health.

CIOs, especially those in banks, have to take a closer look at analytics. Analytics is useful not only for the senior management, but also for all levels including at the grass root. If we look at Indian banks as an example, usually they have a number of branches. If a branch manager sitting at a remote location can be given access to analytics, he will be able to compare his performance with his peers. On a daily basis the branch manager can compare his business with neighbouring banks in the same geography. This will motivate him to improve his performance and also increase revenues.

Apart from this, analytics can mark out trends in customer requirement. Banks will be in a position to devise a strategy based on analytics. CRM is the next in line tool which can be implemented along with analytics. Whether it is from operational point of view or business point of view, CRM is the next big thing to watch out for.