Data and analytics maturity has helped banking and financial services firms navigate the pandemic crisis
As the sector undergoes digital transformation, it faces technological and operational challenges in risk assessment, fraud detection, customer churn and so forth
Digitally mature organizations are leveraging advanced analytics, powered by artificial intelligence and machine learning, to achieve game-changing outcomes across key areas
In 2018, when a leading Asian bank, as part of its data-first strategy, began an initiative to build a next-generation enterprise data platform with Artificial Intelligence (AI), little did it know that this would help the bank double down on intelligent banking and enhance digital adoption amid the pandemic.
This preparedness has served the Banking and Financial Services (BFS) industry well. According to a commissioned global analytics study conducted by Forrester Consulting on behalf of WNS, 2021, 79 percent of BFS companies have seen an upward growth in business performance despite the economic turbulence caused by COVID-19.
Our analytics study reinforces that mature digital capabilities have enabled the BFS industry to improve revenue performance over the past year. BFS organizations are now gearing up to leverage data and advanced analytics to become more insights-driven. More than 60 percent of BFS executives have identified analytics as an area of critical or high priority. 47 percent have identified better data and analytics capabilities as a ‘Top 3’ initiative.
Digitally mature BFS organizations are leveraging advanced analytics, powered by AI and Machine Learning (ML) capabilities, to achieve game-changing outcomes across several key areas, including:
Fraud Detection: UK Finance, a banking industry lobby group, has warned that financial fraud during the pandemic is posing a ‘national security threat.’ To counter such threats, financial companies are using AI and ML for real-time suspicious activity and transaction monitoring, due diligence assessments, payment fraud detection, and surveillance investigation.
Risk Assessment: Advanced analytics is enabling banks to eliminate human error in forecasting the creditworthiness of customers and design offers tailored to individual needs. These intelligent algorithms are also being applied to investment portfolios to analyze real-time data, historical and unstructured data, and media reports.
Customer Churn Management: Banks are using anomaly detection to spot irregular behavioral patterns and identify customers who have a high propensity to leave – thereby enabling the adoption of pre-emptive measures to prevent churn.
Operations Optimization: ML technologies are helping identify efficiency improvement opportunities and streamline operations. Banks are now able to optimize customer experience, offer new services and reduce the cost of delivering services. This is being achieved by leveraging real-time insights based on internal data such as working capital, payments, and liquidity; and external data including market data, rates, macroeconomic factors, and credit ratings.
In their efforts to create winning insights, BFS organizations are driving greater data and analytics maturity by prioritizing investment in data virtualization, data lake, stream processing, and NoSQL platform. They are also taking decisive strides towards strengthening cloud-based analytical capabilities. Our analytics study reveals, 70 percent of BFS decision-makers expect to see an increase in organizational spending on data and analytics in the next 12 months.
In the next normal, enterprises need a solid foundation of underlying data frameworks to drive integrated insights into the core of business operations for improved outcomes and consistent top-line growth. The focus must be on accelerating digitization in every sphere and thus becoming truly customer-centric, innovative and resilient.
Are BFS organizations ready to win in the next normal with data and analytics led insights?
Read our survey report here
Read the overall findings of the Forrester survey, commissioned by WNS.
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Banking and Financial Services
23 May 2022
02 May 2022