Money & Banking

Indian financial companies to increase investment in alternative data sources over next 24 months: Study

Our Bureau Mumbai | Updated on November 27, 2019 Published on November 27, 2019

Indian financial companies, including banks and insurers, are likely to increase investment in alternative data sources over the next two years, according to an AITE global study commissioned by TransUnion.

“Financial institutions have placed an increasing amount of influence on the value of expanding data sources.

“The desire to invest in data includes new sources such as non-traditional, third-party, and alternative data among the banking and insurance communities,” the study noted. These alternative data sources includes mobile data such as browsing and app usage, purchase or spending data, social-media data, and transactional or bank account data.

It revealed that over the next 24 months, 99 per cent of the institutions in India have plans to use alternative data, which is much higher than the global percentage of 89 per cent.

App usage, web browsing

Globally, more than half of the respondents plan to increase investment on data sources, with 65 per cent planning to increase spending on newer forms of data such as mobile information about web browsing and app usage.

In India, this was even greater at 76 per cent. Additionally, 59 per cent of the executives in India indicated that the integration of new data sources will be very important to their business strategies.

However, the lack of the right tools continues to pose an issue, as only 32 per cent of the firms in India can integrate new data sources across all their analytic solutions, it noted.

The study also found that the proliferation of Artificial Intelligence and Machine Learning is expected to continue over the next 24 months, with three out of four global executives considering integrating new analytic technology into their platforms.

“Businesses are re-evaluating their technology investments and are looking to implement artificial intelligence, machine learning, and alternative data models and sources,” said Harshala Chandorkar, COO, TransUnion CIBIL.

The quantitative online survey recorded the feedback of 682 marketing and risk executives at financial institutions located in India, UK, US, Hong Kong and Canada, with many doing business globally.

She also added that it is essential to drive inclusion of alternative data in the ambit of credit bureau coverage in India to include larger sections of society that may not have a footprint in the formal credit sector.

Published on November 27, 2019
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