Banks, no doubt, have large amounts of data on their customers. And this "data" is one "brahma-astra" that can unleash unprecedented value for Indian banks, as it reveals the full financial genomre of the customer -- be it an individual or a corporate. Banks should, therefore, leverage this (data) to their advantage, notes a study by Boston Consulting Group.

The report titled "Hidden Treasure: How data can turn the fortunes for Indian Banks" argues that using data in every component of the banking business model could cumulatively add Rs 3 lakh crore to the bottom line over the next five years.

The survey findings reveal that banks have more data per unit of revenue than any other industry. The banking industry's current data intensity has been estimated at 5330 GB (gigabytes) for every Rs 1 crore revenue, followed by the media industry (with an estimated 4680 GB of data).

Harnessing this power could potentially uplift the sector's ROA (Return on Asset) by 0.4 per cent, equivalent to Rs 50,000 crore. But to chieve this potential, banks will need to build "memory" and "brain".

While memory can be built by building a massive data lake that can house huge volumes of data in a cost-efficient manner, the brain requires building algorithms and cases that unleash the value of data.

To unlock the value, banks will need to build an Integrated Client View (ICV) of customers.

Levers such as differential pricing, sharper credit risk assessment and early warning systems would drive RoA improvement through better income and lower NPAs and customer analytics - help reduce regrettable churn, increase engagement and sales, the report suggests.

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