By Ramki Gaddipati, Co-Founder & CTO, Zeta
COVID-19 has changed the way people work, shop, socialise, get their everyday necessary things done. The massive shift towards online banking and digital payment is a boon for the Financial Service Companies. Digital payment did not just help in boosting online and offline sales but has also resulted in generating an astronomical amount of data every day. The data is coming in all forms from both transactional and non-transactional customer data.
Big data, which consists of all data gathered by technology in both structured and unstructured way, can be processed with certain algorithms to analysis methods to provide best user experience. Banks and Fintech sector can use big data to anticipate customer behaviour and suggest customised products to keep the consumers engaged and satisfied.
In an increasingly fast and digitalised world where consumers expect finance companies, including banks to understand their need and offer them a personalised scheme that will help them through a seamless experience. The increase in customer demand have essentially made banks to employ technologies like big data analytics, artificial intelligence, machine learning to get through customer demands.
In this regard, big data can be the most valuable asset in analysing the gender, age, spending habit of the customer to provide a tailor-made service and alternate banking products to meet their needs. Here are few pointers to explain how:
Gain a complete view of customers with profiling
Fintech and Banks are into customer-driven industry where it is crucial to know customers first and segregate plans accordingly. Customer segmentation is one of the widespread routines put in place in the financial service industry. However, it lacks the amount of granularity required to truly understand and customise their customers’ needs. Big data analytics comes into place to segment to the next level by building detailed customer profiles using insights into:
Number of Accounts in Use
Products Currently in Use
Offers Declined in the Past
Sought after products
Once the financial service can track these pointers and create a profile, they use it proactively engage with customers, and customise offers and hit them during the right time. This in term, helps both the customer and the financial service to generate revenues with increasing customer values.
Create simple, seamless multi-channel experiences
The fintech industry is evolving at a fast pace, with machine learning and AI where consumers can interact with banks through multiple routes, be it complaints, information, or transaction issues. These Analytical insights from mobile and web application usage can be used to determine if customers are facing difficulties in their interactions on any such channel. From transaction failure to slow transaction process or identifying external threats during any transaction, everything is seamless with the help of big data. Banks can leverage the information to fine-tune the process and fix the problem at the earliest for customers to provide a smooth digital experience.
Fraud Mitigation and Risk Management
While most Indian consumers are advancing towards digital payments, the amount of fraudulent transactions have also increased. Financial Services and Banks are focusing on enabling additional security measures to safeguard sensitive customers data, that might compromise customers credential information.
Efficient and secure authentication process like 3DS 2.0, which is robust and secure and the answer for all the major setbacks faced by consumers. The “risk-based authentication” process that 3DS 2.0 specialises on enabling faster and secure transaction. This advanced payment feature is one of the best examples of how big data can be utilised to ensure high-end security. The next-gen service provider is responsible for the risk-based authentication solution which includes behavioural checks such as device, channel, location, payment history to identify external threats and flag them off for review and block the transaction until all the necessary checks are completed. Therefore, keeping customer data and transaction secure, which in turn helps in building trust for the customer and have a fulfilling relationship with banks.
Right-size the customer experience
With multiple Fintech players in the market, offering personalised services becomes one of the biggest challenges. The customer is spoilt for choice with various options. This is where Financial Services benefits by Big Data technologies who helps them understand customers more intimately and proactively suffice their need in real-time. Alternative banking solutions improve their services into a better and more comprehensive strategy for the final customer, who in the long-run benefits in saving money etc. Unlike traditional banking institutions, fintech companies are more focused in creating personalised financial services to improve their own scalability and customer experience.
(The article has been exclusively written for IBS Intelligence. The views expressed in the article are those of the authors.)