Analytics in the Banking Industry
Analytics in the Banking Industry: Victoria Zagorsky talks to Imran Majid, Head of Analytics at Mashreq Bank.
Please tell us about yourself and your role in Mashreq Bank.
I am an MBA with a specialization in MIS and more than 13 years of work experience across various geographies and financial institutes purely in the field of business intelligence and analytics.
I am heading the Analytics function in Mashreq and I am responsible for customer, portfolio, transactional and segmental analytics, CRM & campaign management, management reporting and all up-sell & cross-sell activities.
Analytics and big data have climbed to the top of the corporate agenda, and many banks recognize that they can leverage data to increase revenues, drive customer loyalty, control costs and mitigate risks. In your view, what is the most important value proposition of analytics to banks and financial services organizations?
We live in a world which is fraught with complexities. Changing and challenging everyday scenarios are a part of life.
Smart analytics can help in managing, mitigating, optimizing and taking advantage of these situations.
Data, if presented correctly, has the power to provide meaningful interpretations of past behavior and to a certain extent predict the future with a reasonable level of confidence. While critics can continue to argue about intuitive versus a scientific approach to decision making, in my opinion, it would be sacrilegious to put both approaches on the same platform.
To restrict oneself to pick one or two value propositions of analytics would be a sin. The entire tactical as well as strategic orientation of banks has to be based on insights driven from data.
What role does analytics play in your company’s strategy and day-to-day operations? What are the most common areas for applying analytics in Mashreq Bank?
Mashreq is a very analytics driven and data oriented organization; be it discussions, decisions or challenge sessions – everything is driven not just by data but supported by well-crafted and meaningful insights arrived by an in-depth study and analysis. Analytics is applied extensively at Mashreq for running and optimizing marketing campaigns, customer migration strategies from a brick & mortar platform to online channels by leveraging on transactional analytics, next best product offerings based on customer lifecycle and propensity to buy, driving sales performance using activities co- relation and vintage analytics, to name a few.
What do you think are the key challenges to making business analytics work?
Many organizations fall into the trap of building a business intelligence unit that is actually doing nothing but management reporting or routine data mining; not realizing the power of information that is nestled within all of this data. Extracting value out of data is the key; it is easy to churn and pull out data but creating insights and inferences is the difficult part.
To make business analytics work for you, you need to have the right qualified people in place, the right systems supporting the analyst and a management team that believes in the value that analytics create. In Mashreq we are blessed to have all of these three components – insights are created, challenged, valued and put to good use.
Banks have the vast amount of granular customer data at their fingertips. What are your major recommendations on how to effectively leverage both structured and unstructured data from internal and external sources in order to create actionable insights?
To effectively leverage data (be it structured or unstructured), data warehousing is the MOST critical success factor.
Data sources are usually varied, coming in from different systems or different providers (in case of external data) and all of them have to be intelligently handled. Data should flow into tables within the warehouse at certain frequencies with segmenting and indexing helping in optimizing performance. With such huge terabytes of data available; creating insightful analytics efficiently would not be possible without a proper data-warehousing infrastructure; running co-relations, generating insights and doing multiple iterations would be quite a struggle.
What is the current state of analytics and big data in the Middle East? What do you see as the big trends that will impact the future?
Middle East in the very recent past has been hosting quite a few summits and conferences on Big Data and Analytics and there seems to be quite a lot of acceptability of analytics as being one of the key areas which organizations are investing in. While Big Data is a relatively new concept but organizations to some extent are in some form or the other area already proponents of the underlying themes behind this concept.
Mashreq, for example, looks at detailed transactional behavior at a customer level coupled with interaction history to customize product offerings – this is nothing but an application of the Big Data concept.
As technology evolves with external data including credit bureau, social media and telecom being made available much more easily, the early adopters within the banking space will have a distinct advantage of leveraging the power of analytics to its full extent. The laggards in the group will have to come up the curve quickly, as analytics will play a more important and critical role in portfolio maximization and new customer onboarding, thereby providing a distinct competitive edge to the early adopters.
What advice can you give to young professionals starting in analytics today?
Analytics is like storytelling. It is more of an art, than science. Every number, every fact, every figure has a story and it is up to you how you create and build the right content and framework. Don’t just pull out data, understand the story behind the data and you will see there is always an insight lurking behind those spreadsheets. Believe in the power of data!
Imran Majid is the Head of Analytics at Mashreq Bank.