By Akhilesh Ayer, Head, WNS Triange
Evolving market conditions and fast-changing customer expectations are compelling companies across the banking and financial services sector to adapt or be left behind. Mature data and analytics practices will be key to organizations staying agile, competitive and customer-centric in a digital-first era, says Akhilesh Ayer, Head, WNS Triange.
Digital platforms have become the preferred channel for customer interactions across the globe. In the US, 89 percent of bank-account holders use mobile banking for account management. However, only 66 percent say they are satisfied with their bank’s digital services. As visits to physical branches become a thing of the past, the Banking and Financial Services (BFS) industry needs to strengthen its digital foundations.
The level of customer focus and service established by technology giants such as Uber, Netflix and Amazon has become the norm. Consumers increasingly expect similar experiences with their banks and are quick to shift loyalties to match their needs and preferences. According to research published by EY, 27 percent of global consumers already have their primary financial relationships with tech-savvy neobanks. Furthermore, a recent survey by Bain found that, depending on the country, 25-51 percent of all banking product purchases go to banks that are not the respondent’s primary bank.
The implications are particularly serious for midsize banks that risk being squeezed as they lack, on the one hand, the agility and technology-first approach of fintechs and, on the other, the extensive resources and scale enjoyed by larger legacy banks.
Why analytics can be a game-changer
A commissioned global analytics study conducted by Forrester Consulting on behalf of WNS, 2021, reveals a direct correlation between investment in data and analytics and the ability to develop the kind of advanced products and services that are essential to meet increasing customer expectations. Improved decision-making and topline growth are two other unmissable advantages of mature analytics.
Our survey emphasizes that while the BFS sector has a higher data and analytics maturity than most other industries, critical gaps remain. Different companies are at different stages of data and analytics maturity. The benefits that come with a mature analytics ecosystem are thus not equally distributed throughout the sector. Many BFS firms grapple with siloed processes, fragmented data, poor data quality and an inability to manage large quantities of unstructured data. These hurdles impact the ability of organizations to orchestrate effective strategies, master data management and achieve a unified, 360-degree view of the customer, among other things.
Building data and analytics maturity
BFS organizations must identify the gaps in their analytics systems, and chart out a strategy to build competencies and invest in the necessary tools and talent. Buy-in from the C-suite will be critical to maximizing outcomes from investments in advanced analytics. Very often – and this is particularly true for companies that have just begun their data and analytics journey – we see that the lack of a clearly articulated strategy and C-suite support thwart data and analytics efficacy. It is also imperative that analytics-driven insights are routed all the way to grassroots teams, especially in customer and market-facing roles, to drive the transformation in customer experience.
Increasingly, such insights come from cloud-based analytics and Artificial Intelligence (AI)-driven technologies such as text analytics, natural language processing and speech analytics. The adoption of a cloud-first approach will further build on-demand capacity, scalability and business continuity.
To rapidly build these capabilities, companies will have to collaborate with third-party service providers that offer highly specialized expertise across consulting, managed services, and platform and tools. This expertise will be vital to plug the gaps in strategy, process and talent. In fact, our survey indicates a 39 percent increase, on average, in the engagement of third-party service providers among firms that are currently leveraging external support.
Strategic partnerships will enable traditional banks to benefit from advice on analytical model building and managed services. Today, we see solution partners help banks with processes across risk management, underwriting and credit decision-making. They manage the entirety of credit modeling, financial spreading and covenant monitoring, providing greater speed and cost advantage while allowing banks to focus on core risk management and underwriting. Meanwhile, fintechs can streamline back-office services and compliance, and free up bandwidth to focus on their core competency – technology.
Banks that act now to advance their data and analytics capabilities are likely to have a first-mover advantage in many areas of the evolving marketplace. They will be better placed to handle competitor analysis, changing compliance requirements, and expansion into new markets and territories. Most importantly, they will improve customer relationships and give BFS firms a clear understanding of their most profitable customers and opportunities for up- and cross-selling. The winners in this rapidly advancing industry will be those organizations that leverage data and analytics most effectively and the key to advancement is to start on this journey now.
About WNS Triange
WNS Triange (formerly WNS Research and Analytics practice) powers business growth and innovation for 120+ global companies with data, analytics and Artificial Intelligence (AI). Driven by a specialized team of over 4000 analysts, data scientists and domain experts, WNS Triange helps translate data into actionable insights for impactful decision-making. Built on the pillars of consulting (Triange Consult), future-ready platforms (Triange Nxt) and domain and technology (Triange CoE), WNS Triange seamlessly blends strategy, industry-specific nuances, AI and Machine Learning (ML) operations, and intelligent cloud platforms.
Driving a futuristic edge are WNS Triange’s modular cloud-based platforms and solutions leveraging advanced AI and ML to provide end-to-end integration and processing of data to actionable insights. WNS Triange leverages the combined strength of WNS’ domain expertise, co-creation labs, strategic partnerships and outcome-based engagement models.
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