ANALYTICS IN INDIAN BANKING: THE WAY FORWARD

Abstract: Indian Banking industry has undergone a series of transformations with the advent of Information Technology (IT) since 1980s, 1990s and 2000s in terms of applications of IT in different banking processes from various perspectives such as cost reduction, revenue generation, fraud detection, security issues etc. and this transformation is still continuing with new trend called Business Intelligence and Big Data Analytics. In the present banking scenario Big Data Analytics stands as the solution for the increasing competition and regulatory challenges with fraud and cyber security threats where banks are under rigorous pressure to improve the efficiency and revenue to sustain profit margins and customers. Analytics in Banking supports Decision Making to elevate revenue, control costs and mitigate risks. This in turn improves customer segment; target, create and retain customers along with customer understanding and risk management.

- Vineet Bhardwaj

Introduction:

The Banking Industry has witnessed a huge transformation during the last decade due to technological changes. The advent of information systems (IT) since 1980s, 1990s and early 2000s changed the banks in terms of application of IT in different business process form various perspectives such as cost reduction, revenue generation, fraud detection security etc. Similarly, analytics in banking is also meant for transforming such institution.

Financial metrics and KPIs provide effective measures for banks' overall performance. Banks need to move beyond standard business reporting and sales forecasting, in order to reach their strategic goals. Datamining, multivariate descriptive analytics and predictive analytics help banks to extract intelligent visions and quantifiable predictions that covers all types of customer behaviors such as account opening and closing, transactions, defaults if any and customer exit. With the continuous increase in competition, regulatory changes, fraud and cyber security threats, banks face tremendous pressure to improve operating efficiencies and grow wallet shares to sustain in the market. So, analytics is found to be the solution for better operating efficiency and proper customer engagement and also in mitigating risk as well as optimizing the deployment and utilization of banks resources.

Big Data Analytics: