Key data analytics trends seen in BFSI sector in 2021

The pandemic accelerated the digital transformation journey for financial services industry. While technology was an integral part for the sector, that the speed of deployment is now much faster in today’s times. Massive quantities of data are collected and processed everyday by BFSI companies. This data, once analyzed, has the potential to generate business insights for customer acquisition and customer experience transformation and thereby generate monetization avenues.

BFSI companies are integrating analytics and machine learning into processes that trigger automated actions and more contextual, real-time decision-making. They automate certain processes such as underwriting, customer onboarding, branch operations, customer interactions, and customer intelligence. This includes constantly evaluating data such as transaction status, stakeholder details, transaction type, payments processing, compliance, documentation, and more in a correct and time-appropriate manner to flag actions.

In the past year, big tech companies such as Google, Amazon and Facebook have been breaking into fintech in India, making use of their large active user bases, forming partnerships with Banks, and leveraging the increasing ease of API payments integration across their services to gain a foothold in a competitive market.

For example, Amazon has strengthened its presence in India’s digital payments market through Amazon Pay. It forayed into the Indian fintech market in 2016 with the Amazon Pay e-wallet. Recognizing the potential in India, it partnered with ICICI Bank to issue credit cards and became part of the Indian government’s payment network through the Amazon Pay UPI. Such partnerships, including with ecommerce and across social networks such as Facebook Marketplace and Instagram, enable both tech companies and legacy banks to overcome limits in scale through taking advantage of network effects.

Customer retention and acquisition has always been one of the key aspects in banking both online as well as offline. In 2021, proactively personalized and tailored services which were tailored to the banking needs of the customers were highly in demand.

Today, customers’ expectations from banks and financial institutions have gone beyond being mere enablers to also being counsellors and advisors for their financial decisions. Modern data analytics have helped financial institutions to move the needle towards a more personalized approach for customers by supporting their financial journey through measures such as guidance on savings, along with individualized recommendations for products or services. This in return has helped financial institutions to market and sell products that is relevant to the needs of customers instead of having a one-size-fit-all approach.

Different types of innovators in financial service industry have played meaningful roles by focusing on their key strength areas deploying data. Financial institutions have understood the importance of developing and scaling products and services that address specific use cases. Data and data analytics haves led to growth in businesses in the BFSI space by identifying new business opportunities, designing customer value propositions, and constructing new business models across the financial services value chain.