Moneycontrol News@moneycontrolcom | Nimilita Chatterjee
Financial institutions harnessing advanced analytics techniques are fast becoming business as usual for the sector. The use of analytical tools and sophisticated techniques is increasing, not only for everyday operational efficiency but also for gaining and retaining customers.
Most financial services companies understand that “one size does not fit all, and that they must have sophisticated analytics in place to help them move from broader non-segmented marketing/risk practices to micro-segmented offerings.
The first step in any intelligent data analytics journey should be grounded in understanding the portfolio, the market and the levers that are available to align the business to the strategic direction. Analytics empowers business with enriched information that can be implemented in the business and measured for success – that is the single biggest strength of the science.
Challenges in realizing RoI out of analytics: Advantages of analytics is pretty evident by now. However, how many organizations are actually able to leverage the true potential and realize better RoI out of analytics? to be able to do that, banks and FIs must address some of these critical challenges.
Structuring and collating the data into a single source of truth: This is the most important. Unless this bedrock is built and sustained, results will vary and also not be reliable and replicable.
Having the patience to allow the time for analytical interventions to show results: This is no silver bullet or magic wand and hence the actions and their reactions need to be measured, compared and then scaled out. This will take time and business teams need to spend the requisite time to see results. The investments in people and technology are upfront but the results will come slowly and steadily.
Implementation of analytical outcomes often needs changes in processes, mind sets and ways of doing things. To realise the full value, the change needs to be deep seated and sometimes this takes time. There also needs to be investments in technology etc. which may cause disruptions in the old way of executing and hence investments in training etc. also need to be made. For branch offices and non-centrally run teams, this may be a challenge.
Operational challenges: Implementation of analytics requires process changes and operational complexities. There is also a mindset issue which needs to be addressed as conventional wisdom may get challenged by analytical outcomes. Being able to execute this properly on the ground is key to success and is also a challenge while the organisation transitions from manual/gut feel based processes to analytics led ones.
Measurement: It is key to measure success correctly to decide ROI. Being able to measure against a like to like control group and keeping the control group pristine is paramount to ensure that the real ROI can be measured. This is often a challenge and special care needs to be taken.
Talent to sustain the growing analytics needs: There are investments needed in technology and people. Scarcity of talent and ability ensure that the right people who can deliver actionable insights is a challenge this industry is grappling with. Open source technology is easily accessible but the investment of setting up data, investing in the right tools and creating insights that are implementable is key.
For analytics to show results and be able to transform businesses having an internal sponsor from the top (the CEO) is imperative. No organisation has seen success without an all -pervasive change with a push from the senior managers who believe that analytics can change how business is done and delivered.
The author is Senior VP, Data and Analytics, Equifax.
Read more :- https://www.moneycontrol.com/news/technology/there-is-no-silver-bullet-to-get-better-results-from-analytics-4124801.html
