Geospatial technologies (GT) which emanate from core remote sensing technologies and geographic information systems, have wide scope for operational applications in the commercial banking domain.

Primarily used for digital surveying and mapping, GT enables collection, processing, visualisation and interpretation of geo-physical data pertaining to target Areas of Interest (AOI).

The raw aerial imageries of the terrain sourced from Remote Sensing satellites or gathered deploying GPS guided UAVs/ drones are processed using photogrammetric and Digital Elevation and Terrain Modeling tools to generate base maps of the AOI.

Field data required for end-use applications are gathered from site surveys and digitally layered on the maps as additional attributes.

Using change detection software, the previous and current maps are compared to identify the physical changes that may have taken place in the AOI during reference time spans and measure and quantify the variations, both in terms of extent (spatially) and content (volumetrically) for further interpretation and analysis of the impact/effects of the changes.

The level of accuracy and clarity of resolution of the maps would depend on the end-use objectives, whether macro or micro-locational.

Modern Remote Sensing satellites are capable of delivering aerial images with positional accuracies of less than one metre and resolutions of scales of less than 1:10. A normal drone can capture images with 2.5 cm linear accuracy from a height of 100 metres.

Universally, the government sector constitutes the major users of these technologies. With software and equipment costs becoming increasingly affordable, deployment of geospatial technologies in the private sector for commercial applications is on the rise.

Global revenues of the geospatial industry are currently estimated to be $300 billion, the domestic market size being about $45 billion.

Geospatial technologies now find only token and peripheral application in banks, such as for mapping network of branches or identifying areas for conducting market development surveys. The potential benefits of deployment of GT by banks are far greater than perceived at present. Innovative customisation and adoption of GT solutions could help banks in controlling and managing credit risks more effectively and improving overall operational efficiency.

Approach to technology

GT implementation process in banks would begin with geo-referencing all branches on a satellite sourced map, which shall be integrated with the bank’s data base on performance parameters and deployed on an intra-bank web portal.

Click and view dash boards linking the geo-tags shall enable the Operating Controllers at the Regional Officers to carry out a virtual on-line tour of all branches, viewing the data layers along with visuals of the geographical features of the area of operation of the branch.

The dash boards could also facilitate brief messaging to and fro the branch and controller. The maps and data bases shall be updated at desired periodicity for tracking changes on ground and monitoring business performance at regular intervals. GT solutions can be adopted modularly to meet specific functional requirements.

Performance budgeting

Bank branches cater to large and varied geographical areas of operations. GT would facilitate precise and accurate understanding of the geo-physical features of the area served by the branches and setting business goals realistically in relation to actual business potential on ground.

The present performance budgeting systems in banks are generally trend-based. Reliance merely on past growth trends, sans ground truths verification, could lead to missing out on the existing as well as new business potential available to the branches.

Agricultural banking

GT shall generate high resolution maps of each farm which shall provide aerial visuals of the present condition of standing crops in 3D mode. Each crop loan shall be geo-tagged and status of account updated from the bank’s data.

Applying the norms of unit cost and yield ratios adopted by the bank for the crop, the expected yield from the farm for the season shall be computed. Comparison of the imagery of the previous season with the present would indicate likely variation in yield. If any deterioration/damage of crops are observed, the quantum of likely losses would be estimated for realistic provisioning for the loan and invoking crop insurance cover.

Industrial finance

Factories, warehouses, stores and stock yards of large industrial units financed by the bank can be geo-tagged. Periodic surveys shall be carried out deploying drones and 3D mobile cameras, which shall depict actual physical stocks available on site.

If any major discrepancies are noticed between the GT outputs and the stocks statements submitted by the borrowers, controllers could order a detailed site inspection. Such surveys may also be conducted prior to and after effecting large disbursals from the account to ensure proper end use of funds provided.

Infrastructure finance

GT is ideally suited for monitoring large infrastructure projects financed such as roads, mines, ports, telecom, power, housing development etc. 3D satellite imageries of the project sites, supplemented by drone surveys, shall help measure and evaluate the actual physical progress from time to time, say kilometres added in road construction, the total area mined and the volume mined, new telecom/power transmission towers erected, number of residential units completed in a housing development project, etc.

Follow-up of NPAs

District-wise data on priority sector NPAs, with segmental composition, shall be layered on the satellite maps and displayed on the dash boards together with figures for previous months, facilitating area specific recovery strategies. Controllers could convey their directions to the branch and receive responses via the portal.

The satellite/UAV imageries provide authentic time-stamped ground data, independent of borrower-sourced information, acting as a fact check on the status of projects/assets financed. The imageries can cover large areas of interest involved in infrastructure projects, not possible of physical inspection and accurate measurement of by manual means.

Any object, area or attribute can be geo-tagged and digitised and tracked at desired intervals with ease. Controllers can virtually track the performance parameters of branches at regular intervals on line and plan site visits based on priorities. GT could bring about substantial savings in administrative and credit supervision costs. The solution can be customised specific to industry verticals and high value credit exposures.

The cost of the technology would be a fraction of the size of the credit portfolio and may be recovered in the case of large corporate borrowers. GT solutions are practical and pragmatic. At a time when banks are straddled with the twin challenges of having to rein in NPAs and achieve qualitative credit and business growth, GT could effectively complement the extant operating systems and processes serving as highly useful management information and decision support tool.

The writer is a former General Manager of SBI, now engaged in the GT domain

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