FNB says that the age of “big data” is beginning to filter through into the banking environment, and in the era of information, the bank with the most actionable insights is the winner.
Its no secret that FNB has stolen a march over its traditional competitors in SA over the past few years, particularly in the digital space.
Big data refers to large amounts of complex information, which often contain a variety of facts, generated at high speeds, and can sometimes be inconsistent.
“For example, your bank has data on the products that it currently holds for you, along with your transaction behaviour,” said Yudhvir Seetharam, head of analytics at FNB Business, who notes that banks are able to design customer-centric solutions using statistical models and information gathering techniques.
“To acquire and retain customers, teams of individuals, called data scientists, have to develop means of optimising revenue for the bank as well as the customer. These data scientists sift through large amounts of information to offer meaningful insights that can guide, and sometimes drive, business strategy,” Seetharam said.
The analytics expert opines that the worst hurdle to overcome relates to data integrity – often banks do not have accurate data on their customers as much of this is user inputted, leading to basic errors which cause complex problems.
“Additionally, the speed at which data is analysed and interpreted is essential as there are a number of competitors going through the same exercise. Here, it is often the case as the first to implement a solution is the winner,” Seetharam said.
FNB says that big data allows more personalised approaches to selling products that are best suited for the customer and are timed correctly. This translates to higher acceptance rates, streamlined infrastructure costs and increased customer satisfaction and bank profitability.
“Big Data enable banks to deliver performance management platforms to drive productivity and service delivery at operational centres. Lastly, being able to understand the customer allows better credit risk management – ranging from granting of facilities to mitigating fraud,” Seetharam said.
Studies have shown that banks that effectively use big data to focus customer analytics show a 4% gain in market share over competitors, FNB said.