Indian banks harness big data analysis amid competition

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Indian banks harness big data analysis amid competition

Viraj V Desai

The increasing penetration of broadband and the growth in smartphone usage in India are driving the development of IT-based services for consumers at banks. 

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At the same time, new banks are emerging. The Reserve Bank of India, which regulates the Indian financial sector, announced guidelines in February for new companies to enter the banking sector.

This will lead to increased competition in the Indian banking sector and make better use of the customer data available. Big data analysis is an increasingly important strategy that can help banks differentiate themselves from their competition, according to Manish Bahl, country manager at Forrester Research in India.

In the wake of increasing competition from newer players as well as greater reach of public-sector banks, technology will be increasingly important to help banks stand out, with big data a key strategy for many.

Big data implementation will be crucial to addressing the opportunities and threats in the new evolving environment,” said Mukeshkumar Jain, CIO at ICICI Bank. “We believe that this is the right time to invest in big data for a bank of our size to better engage with our customers at various touch points.”

Big data analytics and strong planned needed to execute big data solutions

“There has also been significant focus on e-commerce, and it is important for the bank to be available across various channels and geographies on a 24/7 basis. In this open environment, it hence becomes important for the bank to maintain a constant vigil through strong fraud monitoring systems, including real-time analytics,” Jain said.

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He added that in order to successfully identify and implement big data solutions and benefit from the value that big data can bring, banks need to devote time and resources to meticulous planning for strong execution.

Jain said competition will ultimately benefit everybody in the industry as it is in the best interest of the customers. “With the emergence of non-traditional players like NBFCs, telecom companies, e-commerce with cash on delivery options, etc., there will be a plethora of opportunities for us to not only co-exist but also to flourish.”

Bahl at Forrester Research expects the new entrants to target the same urban and semi-urban customers that existing banks target, as these are the most profitable customers.

The use of mobile devices is transferring power to individuals in their moments of action, Bahl added. This makes data critical in helping banks understand their customers’ needs.

“Banks can influence the behavior of their customers by delivering products and services on mobile devices based on their online behavior,” he said. Business intelligence is crucial.

Bahl said a three-pronged approach would help CIOs to leverage big data for ensuring growth. This includes adopting an incremental open source big data approach to free up money for new technology development and products, embracing the big data-as-a-service model to address the skills gap, and leveraging mobile as a big data delivery mechanism to improve customer loyalty.