Headquartered in Chennai, Crayon Data is one of Asia’s fastest growing Big Data companies specializing in Big Data, Analytics, Business Intelligence, Simpler Choices, Technology, Recommender Engine, and Choice Engine, thus enabling businesses to provide ultra-personalized choices to their customers.

Nearly 65 percent of India’s population is below the age of 35. Why is this demographic significant to the banking industry? With the world going mobile, today’s millennials expect a range of services, on their phones or tablets, at the click of a button while being on the move. Then why not carry your bank with you? It’s a thought that may not have struck the banking industry two decades ago. But, in this rapidly changing world, several banks have upped their game, and there is huge scope for innovation.

One of the most essential ingredients in understanding customer needs and behaviour is data. Big data is a universe that needs to be crunched. Over the years, banks have realised its importance in their day-to-day functioning. Earlier, big data was unstructured, and initially monitored by the internal warehouse teams. With technological advancements and memory getting cheaper over the years, the repository of big data has increased and with it, the financial industry has learnt how to make use of this data more effectively.

Big data has altered the dynamics of banking in the development of digital banking. It runs parallel to traditional over-the-counter banking. The latter, which still enjoys a loyal patronage among more older customers, who may have set up their accounts in the pre-digital era. However, recently banks have been under pressure to deliver the same kind of personalised services offered by their competitors in the financial services field.

These competitors are not banks in their own right, but they offer services that are known to engage better with their customers, such as private wealth management firms. In an economically unstable climate, with looming job losses in sectors such as IT, the need for better financial planning has gained ground. Customers would like to be advised on how much to invest and where, mutual funds versus fixed deposits, what are the

better performing mutual funds and so on. They are more than willing to pay for these additional services too. Since the demonitisation wave last November, the government has encouraged shifting to cash-less transactions where possible. This has given e-wallet firms like PayTM, PayUMoney and Oxygen a big boost. Some of these firms are digitally superior to banks, so this is a wake-up call for banks and financial institutions, to keep pace and deliver similar services.

According to recent surveys, many customers felt that their preferred banks didn’t understand their needs well enough, in terms of their short and long term financial goals. The need to offer better financial planning services to customers is one big personalisation gap banks should be looking to fill. Banks can also enhance the personalisation experience by continuously engaging with their customers and not just limit it to a handful of face-to-face meetings. Examples of this are, sending alerts to their clients about unusual activity in their accounts, information on their spending activities, advice on how to avoid unnecessary fees and penalties, encouraging direct debits for bill payments, information on third party services, and tailored relevant offers.

Leading banks in India have set the trend in personalisation. HDFC Bank took the lead in the use of analytics back in the early 2000s by investing in technology that would help them make sense of unstructured data. The gains were understanding a customer’s financial habits and their personal habits, thereby allowing them to promote offers accordingly. One example is offering a pre-approved loan, which the customer can access within minutes without having to head to the branch. A customer’s social media profile can also be analysed. For example, if a customer is planning a vacation abroad, the bank can offer her/him a product that could help fund her/his travel.

A public sector bank like State Bank of India is also using analytics to track its own services. They are applying their data models to education loans, housing loans etc. to try and cut down on bad loans. For instance, in giving student loans, they research what colleges in which cities, have the most number of defaulters and how to adjust for the increased risk.

ICICI Bank has used technology in its debt collection process. Debt collection can be a delicate thing – how does a bank ensure the process flows smoothly without losing its customers? ICICI divided the defaulters into high risk and low risk categories. They use multiple channels for debt collection. Low risk defaulters can be reminded gently via SMS or emails, while phone calls can be made to the high-risk debtors.

What customers now expect from their banks is to keep up with the times. Personalisation and digitization go hand in hand in this development. One of the key takeaways from The Digital Banking Report sponsored by Personetics is that personalization across all stages of the consumer journey will be a key differentiator for banking in the very near future.

What customers now expect from their banks is to keep up with the times. Personalisation and digitization go hand in hand in this development

However, larger banks – especially those that have a legacy, may find it tough to innovate internally due to bureaucracy. A good option is to partner with a third party, like a Fintech startup. Fintechs bring with them fresh ideas and technology that will help banks scale up their operations quickly and effectively.

As banks look to build their digital brand, the important thing to note is that the primary business of banking won’t go away. Banks should look to understand their customers better and ensure that their relationships with their customers grow laterally.