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Economy

RBI Dy Gov on Analytics and Social Media

Dr. K.C. Chakrabarty, Deputy Governor of the RBI, talked about technology in banking. Specifically, how tech has been used, what will change and the recent initiatives.

20. Banks can use analytics in a big way for Business Intelligence encompassing simple querying and reporting mechanisms that improve decision-making, Analytical Applications using data models, process workflows etc., Financial Performance and Strategy Management comprising budgeting & planning and scorecards and Advanced Analytics including data mining, predictive modelling, ‘what if’ simulations etc. Banks may also look at carrying out ‘Sentiment analysis’ to better understand internal customer data and understand perceptions about bank’s brand, products and services, and identify problems with customer experience so that banks can act efficiently and effectively.

He calls the use of analytics a Game Changer. With more and more data available, it wouldn’t be surprising that banks begin to use it appropriately; but the RBI must follow as well. For instance, what is called an “NPA” by the RBI is when someone doesn’t pay for 90 days. And then the loan becomes “doubtful” only after 15 months of non-payment. This could be true for, say, a corporate loan. But at a personal level on monthly EMIs, even one or two missed payments, non-accidental, can raise a red flag. The 15 month theory is just way out – banks need to act far faster than that.

Now, banks could use geo-analysis to find out geographical concentration. Too many loans to people staying in one location, and not others? More south than north? Some branches doing far worse than others? Visibility of these elements to anyone in bank management, will drill-down-able visualizations, might introduce action far earlier than later.

And I say anyone because you can’t expect management to drive this; you have to make the info available to foot soldiers. They will use it far better, either from competitive pressure, or by simply suggesting changes that you simply can’t imagine from far away. The RBI has worked hard at centralization of data, but now, banks need to federalize analysis and action.

Another interesting piece, on social media:

23. Social media is a blending of technology and social interaction for the co-creation of value and this can emerge as another game changer. It is one evolving channel that might help banks to generate insights on customer attitudes and preferences, which can be used to inform marketing campaigns and help deliver better customer experiences. For banks, use of the social media has its pros and cons. One influencer can drive thousands of potential customers to a website. However, that same influencer can spread his or her dissatisfaction, causing erosion in brand equity and profitability. Regardless, embracing social media may not be a choice for banks as of now; though it is an imperative.

Well said. HDFC Bank has a twitter ID now, @HDFC_Bank, and ICICI Bank has @ICICIBank_Care and so on.

These are currently outsourced to other organizations, where the ability to actually help out people is next to nil. They always ask you to either “DM your contact number” or “Send us an email”. This is not the way to do social media, because all you’re doing is driving people into dark holes. It’s sad; there’s so much more they could do! (Announce interest rates, mention when a problem has been solved, talk about new products)

Interesting paper, and I see it as what banks need to do with technology going forward.

Do also read RBI’s IT Vision for 2011-17.

  • ICICI Bank Care says:

    Dear Mr. Shenoy,
    We’re glad that a person of your stature has noticed that ICICI Bank has been an early mover in social media through our presence on Twitter at @ICICIBank_Care and elsewhere.
    At ICICI Bank, we’ve grown to be India’s leading private sector bank with a certain focus on customer satisfaction and on solving problems reliably and quickly. To that end, we’ve integrated our social media front-face with our back-end customer service operations using technology and the results have been quite promising.
    You noted that we typically ask people to DM us or to email us. This is primarily because we do not want anybody to divulge their account details or contact details in an open stream. We look at social media as a means to reach out to consumers wherever they are, to learn of their issues if they have any, and to solve them in a way that is not just secure but also most convenient to them – this is typically through a phone call from our customer service team.
    You mentioned a few other roles Indian banks could play in social media: we’re already doing a lot of what you mention: please do see examples at http://twitter.com/ICICIBank_Care/status/68578659593756672,
    http://twitter.com/ICICIBank_Care/status/63514808401657856 and http://twitter.com/ICICIBank_Care/status/26972197801168896 and in the months to come you should see more examples of our usage of this medium.
    We thank you for your continued coverage of our industry and we look forward to your continued insights, criticism and reviews.
    Regards,
    ICICI Bank Customer Service Team.

    • Thanks for your comment. I’ve published it as is; while you do provide occasional news, you would do much better to provide a better experience, and since you take a complaint by DM, I presume you will know when that customer is satisfied, and you can post him a note at twitter; this is really the way social should be. (Don’t need his account numbers to be revealed)
      Do note, however, that you’re on a good path; keep at it, and you’ll do very well. And many thanks for your compliments!

  • ICICI Bank Care says:

    Dear Mr.Shenoy,
    Thank you for your feedback. We appreciate your advice and assure you that we strive to do what is best for our customers.
    Regards,
    ICICI Bank Customer Service Team.