Executives in the global financial services and insurance industries seek out to amass data, futher incorporating AI and ML to process information
Mumbai: Across the globe, companies are amassing volumes of data with the intent of optimizing performance, identifying trends and meeting rising consumer expectations. Yet, nearly 75 per cent of global financial services and insurance executives admit that they are challenged by the fractured nature and vast amount of data available, citing rich analytics capabilities as difficult to achieve. In India, this challenge is even greater with 86 per cent of executives admitting they are challenged by the immense data they have.
Even with these challenges, a new Aite Group global study commissioned by TransUnion found that executives in the financial services and insurance industries globally plan on continuing to secure more data sources. Furthermore, they look to incorporate more artificial intelligence (AI) and machine learning (ML) technology into their analytic platforms to help them make sense of the information.
The global study explored the existing analytical processes, tools, data sources and operational effectiveness of analytics solutions used by the financial services and insurance industries. The quantitative online survey recorded the feedback of 682 marketing and risk executives at financial institutions located in India, UK, US, Hong Kong and Canada, many of whom do business across the globe. The study found that the proliferation of AI/ML is expected to continue over the next 24 months with three in four global executives considering integrating new analytic technology into their platforms. There’s good reason for this implementation as AI and ML can shorten the traditional analytic lifecycle from months to just weeks or even days.
“Businesses are reevaluating their technology investments, and looking to implement artificial intelligence, machine learning and alternative data models and sources,” said Harshala Chandorkar, COO at TransUnion CIBIL. “Their end game is to gain deeper analytics and competitive insights that better allow them to mitigate risk and meet consumer needs. Ultimately, the companies that best leverage these data and analytical technologies will provide consumers with the best experiences, resulting in more revenue.”
Data Sources are Expected to Grow
The desire to invest in data includes new sources such as non-traditional, third-party and alternative data among the banking and insurance communities. Over the next 24 months, almost all (99 per cent) of institutions in India have plans to use alternative data – notably higher than the global percentage of 89 per cent.
Investment in Alternative Data to rise
Explaining the need to drive alternative data reporting in India, Chandorkar added, “While businesses upscale their investment and expertise in alternative data analytics, it is essential to drive expansion of alternative data in the ambit of credit bureau coverage in India to include larger sections of society who may not have a footprint in the formal credit sector. Alternative payment data such as records of payment on electric, telecommunications and other recurring obligations can help evaluate the risk to those potential borrowers that are outside the credit mainstream. Inclusion of alternative data in mainstream credit information databases will help drive ease of doing business as well as financial inclusion in India.”