State-run banks plan data analytic wings to curb fraud
Premium- The new system is expected to help banks make data-driven decisions that can improve business-related outcomes
NEW DELHI : State-run banks may soon have dedicated analytics teams to analyse data to track frauds, detect stressed borrowers who may default on payments, and help the lenders stay ahead of competition.
The finance ministry asked all banks to identify key resources from within the bank and outside to be part of the new vertical that would provide them with insights aimed at improving efficiency while keeping a close tab on frauds and the build-up of bad loans.
Big data analytics is a form of advanced analytics, which involves complex applications with elements such as predictive models, statistical algorithms and what-if analysis powered by analytical systems. The right use of big data analytical systems and software is expected to help banks make data-driven decisions that can improve business-related outcomes.
“The benefits of introducing data analytics are immense. It may include more effective marketing, new revenue opportunities, customer personalization and improved operational efficiency. With an effective strategy, these benefits can provide competitive advantages to banks over rivals," said a person privy to the development.
A query sent to the spokesperson for the finance ministry and the secretary of financial services remained unanswered till the time of going to press.
According to the plan, the dedicated analytics unit in each bank would have a group of experts comprising bank officers and external experts who could utilize big data and analytics for predicting outcomes based on internal data.
The group of experts will identify ways to integrate data sources to develop a single source of information for analytics. It will also discuss modalities of using big data for revenue generation and personalization of services to the customers.
The persons quoted above said that the analytics vertical will also introduce models in digital analytics for cost, risk and capital management, including credit decisions, credit monitoring, fraud prevention, compliance management, collections, etc. One focus area of the new vertical will be to deliberate on enhancing customer experience.
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Officials aware of the matter said that the analytics team would further work with all banks, guide, handhold and coach lagging banks to achieve the set targets.
“The aim is to make public sector banks compete with the best in the industry through active use of modern tools that help maximize businesses and enhance customer experience which will help PSBs to better counter emerging competition," the official said.
The measures are also expected to facilitate proactive detection and prompt declaration of wilful defaulters by evaluating all large value corporate accounts and tracking fraud incidences linked to employee compliance.