By Harshvardhan Lunia
Simply put, Big Data refers to large quantities of structured and unstructured data that can be employed in a systemic fashion to discern accurate patterns across industries. Data analytics and cognitive computing were once, ancillary to business functioning.
Today, Big Data stands out as an industry in its own with the potential to have a deep impact on various verticals. As a technology, Big Data is not new but the way it is being used is evolving each day. Potential difference that it can make towards business process efficiency and on consumers’ lives is too large to fully fathom already.
To gauge the potential of Big Data, a cursory glance at its impact on Indian healthcare, for instance, is good for starters. There are companies leveraging the ubiquity of smartphone for data collection to predict chances of various diseases amongst India’s rural population.
Predictive health interventions are a strong indicator of one’s health and a positive beginning in a country, where health awareness has typically been low. But that’s not all. The healthcare industry at large is generating zettabytes of data each day through medical records of patients, doctors’ prescriptions, medical research, etc. This data is being mined to ascertain early onset of illnesses that can be cured with greater alacrity, than ever before. Several companies in consumer genomics space are also relying heavily on Big Data for breakthroughs in drug discovery and medical technology.
Just as in the case of healthcare, Big Data is capable of creating a deep and significant impact even in the financial technology (fintech) space. The alternate lending industry in India is still grappling with several challenges that include accurate and detailed information of borrowers, tracking their historical behaviour, evaluating their business, etc. Leveraging Big Data means reduced lead time by automating data collection or using sophisticated cloud computing tools such as Hadoop. This helps in analysing customer’s intent to repay and most importantly detecting potential fraud. By using Big Data and analytics from public and private sources and APIs, fintech companies are also reducing elaborate and tedious paperwork drastically. This not only means faster loan disbursement but also reduced costs for SMEs that are already cash-strapped.
The good news for fintech companies as well as borrowers is that, India is steadily seeing an expansion in its information infrastructure. Credit bureaus of the country and information that comes through Aadhaar registration are offering more avenues for data mining. There is also a large scope of data aggregation from non-traditional sources. These could be online footprints, shopping patterns, credit card swipes, data from mobile apps, and from social media accounts of loan applicants, such as Facebook and LinkedIn. These sources are being tapped by many fintech companies to get an accurate picture of borrower’s creditworthiness. They also add to the information via traditional formats such as the application form, CIBIL data, and bank statements. Additionally, as India shifts gradually from being a cash economy, data mining is becoming all the more expedient.
The potential for Big Data in Indian fintech is yet to be fully realised. It is no longer going to be preserve of a few but a necessity for accurate credit evaluation, especially for SMEs. Fintech companies are better placed than large banking corporations to experiment with data sources and identify risk of default. By coupling tech with innovative processes and data mining tools, fintech companies can truly revolutionise the lending process. They can also analyse the actual credit capability of new and growing businesses with a greater degree of nuance. The time isn’t far that applications can be vet overnight and loans will be processed in 24 hours.
Big Data will have a huge part to play in this scenario. It will help fintech companies target their potential customers with curated offerings and services. It also has the ability to drive down costs for loan providers and borrowers making access to capital easier, more transparent, and attractive than ever before.
The author is Co-Founder and CEO, Lendingkart
Updated Date: Mar 24, 2016 11:25 AM