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With a huge data on hand thanks to their big investments in core banking solutions, banks in India are now looking at customer analytics in a big way, Mr Likhit Wagle, Partner and Global Industry leader – Banking and Financial Markets, IBM Global Business Services, told Business Line .
The increasing demand has encouraged the global IT major to expand its presence to various smaller centres across India. “IBM currently has 18 branch offices across the country, with several of them being opened in 2011,” he said.
According to industry reports, the banking and financial services market size in India was about $170 billion in 2009-10. The IT spend in the sector is roughly about 1.5-2 per cent of the total market size.
New norms
New regulatory norms are also forcing them banks to look at more customer-centric approaches in terms of products and services offered.
Such a customer-centric approach will also mean that banks move away from being a traditionally products company and enable them to understand the customer, his/her needs, risks associated with the customer, etc, he said.
According to him, banks are also increasingly moving towards segmentation using consumer behaviour, rather than segmentation by demographics.
“We are helping banks with sophisticated software tools that help predict customer behaviour,” said Mr Wagle. The customer behaviour predicting tools will help banks analyse from the data that banks have accumulated thanks to their core banking solution investments, he pointed out.
He added that banks could use analytics to cross-sell other financial products to their customers.
key areas
“The top few areas we are seeing a lot of traction are around predictive analytics, intensive data demands to manage risk and compliance, innovative differentiation and product pricing models, ability to leverage on emerging technology trends such as cloud, social media and mobile wallet, domain intensive areas such as payments and process transformations,” pointed out Mr Wagle.
With profitability on mind, banks are also thinking on continuing in the payments business, and are looking at outsourcing it completely, pointed out Mr Wagle.
“Banks want to make the payments operations much more efficient and transparent,” he said.
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