Transitioning from predictive to prescriptive analytics in the financial sector is a major step forward, enabling better strategic decision-making, fraud prevention, and improved customer satisfaction. The panelist at Elets 8th BFSI CXO Masterclass emphasized the importance of using data and analytics to make informed decisions rather than relying on trial-and-error methods. Despite the challenges involved, the industry is progressing toward a future where data-driven insights play a key role in shaping financial services.
The masterclass, held from February 8-11, 2024, at O by Tamara in Thiruvananthapuram, Kerala, brought together industry experts to discuss the transformative power of data and analytics in the financial sector. A key focus of the discussions was the evolution from predictive to prescriptive analytics and its profound impact on decision-making processes within the industry.
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The Shift to Prescriptive Analytics
Dr. Anuradha Bhatia, Executive Director & Head-Data Analytics & AI at Standard Chartered Bank, emphasised the critical transition from predictive to prescriptive analytics. Predictive analytics, while useful for forecasting trends based on historical data, falls short of addressing the dynamic needs of today’s financial industry. On the other hand, prescriptive analytics goes beyond forecasting to offer actionable recommendations that can lead to risk mitigation, process optimisation, and cost reduction.
Dr. Bhatia highlighted the volatile nature of customer behaviour and the importance of personalised approaches in retaining customers and identifying opportunities for cross-selling and relationship deepening. She also touched on the role of prescriptive analytics in combating fraud, such as credit card fraud and transactions involving mule accounts, by analysing transaction patterns and leveraging data from various sources to mitigate risks.
Innovation in the Insurance Sector
Kinjal Shah, Chief Technology Officer at YES Securities, discussed the integration of prescriptive analytics in the insurance sector. He pointed out the challenges of outdated models in accurately determining premiums based on factors like age and driving history. Shah stressed the importance of personalisation in customer interaction and the role of analytics in enhancing customer service and making informed decisions.
Shah elaborated on how analytics aids research analysts by alerting them to market fluctuations and facilitating the identification of relevant information, thus enabling them to focus on high-value tasks and make informed decisions.
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Fintech Partnerships and Data Reliability
Aditya Mishra, Chief Data Officer at SBM Bank, shared insights into the bank’s fintech-driven banking model and the critical role of data in fraud prevention. Mishra underscored the challenges related to data reliability, given the bank’s reliance on fintech partners for customer onboarding and service provision. He highlighted the bank’s efforts in implementing innovative measures to ensure data integrity, including developing Data Trust scores and proprietary models.
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