State-run banks plan data analytic wings to curb fraud

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State-owned banks may soon have specialised analytics teams to investigate frauds, identify stressed customers who may fail on payments, and assist borrowers stay ahead of the market by analysing data.

All banks were requested by the finance ministry to select essential resources both inside and outside the bank to be part of a new vertical that would offer them with insights targeted at enhancing efficiency while keeping a careful eye on fraud and the accumulation of bad loans.

Big data analytics is a type of advanced analytics that entails complicated applications that use analytical systems to power aspects like predictive models, statistical algorithms, and what-if analyses. The proper application of big data analytical techniques and software should assist banks in making data-driven decisions that improve business outcomes.

“The advantages of implementing data analytics are enormous. More effective marketing, new income opportunities, customer personalisation, and greater operational efficiency are all possibilities. “With the right strategy, these perks can give banks a competitive advantage over their competitors,” a source close to the situation stated.

Until the time of publication, a query submitted to the finance ministry’s spokeswoman and the director of financial services had gone unanswered.

According to the idea, each bank would have a specialised analytics unit with a group of professionals, including bank officials and external experts, who could use big data and analytics to forecast outcomes based on the internal data.

The specialists will look for ways to combine data sources in order to create a single data source for analytics. It will also go over the several ways that big data may be used to generate money and personalise services for clients.

According to the individuals stated above, the analytics vertical will also bring digital analytics models for cost, risk, and capital management, such as credit choices, credit monitoring, fraud prevention, compliance management, collections, and so on. One of the new vertical’s main focuses will be on improving customer experience.

Officials familiar with the situation said the data analysts would continue to engage with all banks, guiding, handholding, and coaching lagging banks to meet the specified goals.

“The goal is to make banking sector compete with the best in the market by making active use of contemporary tools that help maximise companies and improve customer experience, allowing PSBs to better counter increasing competition,” the official added.

By reviewing all large value business accounts and tracking fraud instances linked to employee compliance, the methods are also expected to assist proactive detection and timely declaration of wilful defaulters.

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