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Data Driven Decision Making - injecting rationality in your gut feeling Sector: Banking Sector in India The data centricity of banking industry is the universal truth. Traditionally banking has been the one sector which handled the maximum data about any person that are particularly critical and dear to those persons as they deposit their trust with the banks in the form of their finances. In the recent times this has been further reinforced with the RBI implementing the “Know your Customer†mandate that aims to compulsorily maintain the customer data which should be relevant, concurrent & authentic. Despite the proliferation of such data, effective analytics and data mining techniques has been at its elusive best. The information industry has grown leaps and bounds and the remarkable advances in analytics software and its processing power aided by the cloud computing systems is just the tip of huge iceberg of potential that such data is capable of achieving. As the industry tries to grow out of the recent financial crisis towards the shady future of uncertainty, banking and retail banking in particular must inculcate the power of analytics in them to be able to improve decision making, indulge in constant innovations which ought to become the bread and butter for survival & be more compliant with the stringent financial regulatory environment that the RBI is supposed to impose for greater control. The siloed approach to banking should give way to enterprise wide resource planning (data being the most critical resource) for fostering greater transparency, efficiency & effectiveness through integration and unified image of the entire sector. This will also help in garnering greater customer trust & rejuvenate customer relationship which is the single most critical factor for survival in times of uncertainty, mistrust & risk. The recessionary trends have forced the clientele of banks to a more frugal approach to managing their funds. Careless consumption has been replaced by need based one and “ROI†has suddenly become the buzzword which never had such a great reputation except amongst the business houses. However it is interesting to note that despite reduced spending the world has not stopped itself from the adoption of latest technologies. Be it smart phones or social media presence the huge numbers are truly defiant of the existing economic conditions and its implications. Such behaviour re-confirms the value of innovations in today’s society besides such channels could provide source of huge data tapping which can help retail bankers to provide a more rewarding experience to their customers enhancing their brand loyalty. The usage of “Big Data†as the new window to the world of increased productivity, innovation & competition is important to be considered here. The rapid adoption of analytical tools would help banks process the information they have into market knowledge which would enable them to differentiate themselves through service excellence. It may sound contradictory that previous paragraphs talked of unified image and integration and now differentiation is promoted. Well, competition has been and will always be the root for future growth without which the need for existence of mankind comes under the radar. Rather we should look at a new dimension of competition – “Competition through Cooperation†where competitors would be on the same page with respect to technology and new inventions yet they would have to constantly evolve themselves to be relevant. Advanced analytics provides the banks with a new path of continuing business by overcoming the obstacles of risk and uncertainty, the prime growth drivers being stricter regulation, better risk management, effective strategising and stronger CRM. The various ways to achieve data salvation is revealed as below: The analytics software would speed up the financial and risk reporting services as required by the new norms as and when implemented by the government ensuring service delivery with no or minimal cost. The usage of Enterprise wide data architecture would provide a single version of banking creating transparency and restoring customer confidence. Data crunching would enforce better risk management by identifying malicious transactions and preventing its recurrence. Usage of technology to combine past and current data can help in predicting future scenarios with greater accuracy and provides an opportunity to face the shady future in a planned manner with confidence. Besides the data analytics tools may be used to boost revenues as well like, Customer data analytics – enhance service and bring more clients Investment analytics – improve lending process Process analytics – find process inefficiencies and take corrective measures thereby reducing costs, to name a few. [*]Data collection from various sources like KYC, social media websites etc... and it analysis using Big Data and relevant technologies can help in providing customized banking solutions, new financial products to suit customer needs & gather feedback on marketing campaigns launched. This would lead to greater customer satisfaction and tighter relationship. Mobile banking is the new brainchild of the banking sector that allows customers carry out transactions on the move. This means greater volume of transactions to be handled and the usage of analytic software to integrate data across channels become essential. Also multichannel banking is constantly evolving with the endeavour of providing cross channel banking across websites. So far the discussions lead us to the conclusion that usage of Data Driven Decision Making through Data Analytics & ERP is imperative to the future competitiveness in banking industry. But there are major speed breakers in the path to this rediscovery, which are as follows: Modifying existing IT infrastructures and the corresponding data migration might incur substantial initial costs Using analytics at the strategic level would require identification of relevant data and standardization of processes and data structures Resolving frequent data issues & inconsistencies that exists in the customer data in the baking domain Required expertise in analysing data points, process expertise & technical expertise is important Support & Initiative of key stakeholders Finally the embracing of analytics as a service depends on the internal culture and dynamics of the organization. Hence to successfully implement the same nurturing of the employees to convince them of the power of data driven decision making is very crucial. However the conviction in employees can be developed only if the leaders & top management of the enterprise believe in the vision of “Analytics as the future of bankingâ€. Hence the purpose of this article would be to inspire the top management, so that they can realize the importance of using data in their organizational decision making and inject rationality in their decision making. Note - Visitors shall not be able to comment on this article until they are logged in.