BFSI firms in India are innovatively leveraging data-driven strategies to thrive and flourish in recent times. Online banking has already generated customer expectations regarding cutting-edge services irrespective of location and time. Open banking and embedded finance have also raised the bar further, enabling customers to get credits through non-bank enterprises.
Open banking is also enabling third-party access through APIs to financial information. With the increase in advanced banking operations, customers are steadily expecting their institutions to anticipate their needs better.
At the same time, another indicator for BFSI firms about using data analytics in BFSI is to enable better customer experiences for future growth. A Salesforce report in 2019 covered 8,000 business customers and buyers globally and reported how 84% of customers feel that customer experiences are as crucial as the services and products offered by any financial institution.
Data shared across multiple touch points and channels have thus opened up several new opportunities for BFSI players throughout the Indian finance sector to flourish amidst a competitive landscape.
How Data-Driven Strategies are Helping BFSI Firms Flourish
Data analytics in BFSI and other data-driven strategies are enabling BFSI firms in India to thrive and grow in the present scenario. Here are some pointers worth noting in this regard.
It is a fast-changing world that necessitates the usage of data-driven strategies across the board for BFSI firms. The digital banking platform segment is already expected to grow by a whopping 11.2% (CAGR or compounded annual growth rate) from 2021 to the year 2026. Bots are leveraging data to provide better customer service across touchpoints without requiring branch visits or conversations with agents. They can service customer requests easily while handling other activities seamlessly.
Conversational AI platforms are also using NLP that is integrated with IVR systems. These systems can take calls by answering repetitive questions and prevent any customer panic. Customers are assisted in swiftly resolving queries while calls that are complex are transferred to agents. Banks are offering branch-like services with data-driven strategies, building customer profiles/personas, predicting behaviour, and recommending ideal financial services and products.
Fraud detection and security models are trained on continual incoming data, helping BFSI firms know more about normalised activity levels, transaction anomalies, deviations, and more. Another method is behavior profiling which studies customer data and accounts to build profiles and understand where/what kind of transactions have taken place.
Prescriptive analytics also helps leverage the data that is gathered by predictive analytics to recommend the measures to be taken once fraud is identified. These are some of the many ways in which data-driven approaches are helping BFSI players thrive in an increasingly competitive Indian finance sector. As they say worldwide, data is the new oil and it will soon be the differentiator and competitive advantage that companies in every sector will want to harness, banking and financial services included.
What key benefits do Indian BFSI firms experience through the adoption of data-driven approaches?
Data-driven approaches are helping BFSI firms in India obtain several major benefits including the ability to personalise products/services for customers, identify and eliminate fraud, predict risks and manage them accordingly, and a lot more.
In what ways are data-driven strategies enhancing decision-making within the Indian BFSI sector?
Data-driven strategies are boosting overall decision-making within the Indian BFSI sector. Banks and financial institutions are leveraging data to make better decisions on granting loans or other products, offering personalised services or solutions to customers, identifying and mitigating risks, and so on.