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Analytics give banks an edge

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Differentiation and creating a competitive edge are critical to the success in today’s fast-paced, highly consumerised environment. However, achieving this can be a challenging task for any business, and the banking and financial services sector is no different, writes SHAILENDRA SINGH of Wipro.

Faced with the challenge of increasingly commoditised products and services, banks need to stand out from the crowd if they are to get ahead, gain market share and improve profits. Traditional methods of business are often no longer relevant, and their continued use can hinder innovation and prevent banks from delivering appropriate customer solutions and interactions. Incorporating analytics into every stage of the customer lifecycle is the solution, and financial services institutions need to gear themselves to take advantage of the benefits delivered by this powerful tool.

In the financial services sector, particularly banking, the products and services offered by competing brands are all incredibly similar. From current accounts and savings products to investments, loans and credit cards, there are few differentiating factors between the offerings of each different bank. Competing on product is therefore all but impossible. However, often sales staff are put under immense pressure to meet sales targets despite this. Ensuring they are able to effectively market products to consumers requires that they are given the information they need to do their jobs, as well as direction that leads the way to sustainable business. Analytics is the solution to providing sales staff with the information they need to take products to market with confidence.

Enhancing the sales cycle

The sales cycle within financial institutions consists of a number of steps, beginning with knowing the target audience and ascertaining whether or not they meet eligibility and profiling criteria. From there, sales calls and follow-ups are conducted, and then deals are (hopefully) closed. Sales targets are then tracked and monitored. The cycle itself is fairly simple, but can be greatly enhanced in the first stages to improve effectiveness throughout. Providing sales staff with appropriate and timely information utilising analytics can improve efficiency down the line. Besides the basic information of probable customers, their preferences and a list of products they do not yet own, customer information can be greatly augmented using analytical capability. For example, solutions like Next Best Offer use predictive analytics to identify the products or services that customers are most likely to be interested in for their next purchase.

Improved decision making

Monitoring credit risk requires an understanding of the types of customers the bank has, as well as the ability to monitor collections, predict and reduce delinquencies and reduce non-performing assets. In order to achieve this, analytics is an essential tool. Analytics is also vital across various functions of the business, from marketing and sales to Human Resources and finance. Not only does analytics assist users to draw insight from data, it can be used to improve the decision-making process, moving from gut decisions to intelligent, fact-based decisions, which ultimately enhance business success. Analytics also helps users to develop ‘what if’ scenarios that can predict future behaviour, essential for improving planning and product offerings.

Building analytics capabilities

While analytics offers numerous advantages, many financial institutions have yet to acknowledge its importance from a strategic point of view. This is an essential first step in building the required analytical capabilities to deliver improved competitive edge. It is also essential to obtain buy-in at a senior level, as the success of analytics initiatives requires it to be driven from the top down. Analytics should become a cross-departmental function, working across different verticals, lines of business and departments within the bank. In addition, the analytics team should not consist solely of statisticians and IT professionals, but also thought leaders and leaders from within the different lines of business.

It is also important to firstly identify a high-level business problem and a potential solution, which analytics could help to solve. For example, reducing customer churn may be the problem statement, and from there the next step is to arrive at a solution and identify how analytics can be used to overcome the problem. This requires that the right tools are implemented and the right service provider is partnered with. In addition, it requires that the business problem be clearly articulated, so that the solution provider can translate this into processes and a technology solution. Analytics is a step-by-step journey, not a destination, and requires continuous improvement to yield the desired benefits.

The benefits of analytics

Successfully implemented, analytics can deliver numerous benefits across the sales cycle. Customer identification and acquisition can be improved, through acquisition analytics and intelligent campaign design. Customer relationship management can be enhanced via improved portfolio management and meeting transactional needs. Customer cross selling can be enhanced using needs analysis, family demographics, credit history analysis, and the ability to select more products for cross selling. Customer retention can be improved using churn prediction and lifetime value modelling. Customer value can be enhanced, and wallet share increased, using behavioural segmentation, product affinity modelling and differentiated pricing. Analytics can provide the senior management with valuable inputs at each stage in the customer lifecycle. This translates to a better customer experience and enhanced profitability for the bank, giving the all-important competitive edge and enabling them to differentiate on service rather than attempting to differentiate on product.

In conclusion

Analytics offers numerous benefits to banks and financial services organisations. From improving marketing efforts through enhanced targeting to ensuring optimal performance across functional areas such as risk, compliance and fraud, analytics helps to improve decision-making ability and timeframes. Using analytics, banks can not only differentiate themselves today, but will be able to continue to remain competitive in the future.

* Shailendra Singh, Vice President Banking, Africa and Europe for Wipro

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Prepare your cam to capture the Blood Moon

On 27 July 2018, South Africans can witness a total lunar eclipse, as the earth’s shadow completely covers the moon.

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Also known as a blood or red moon, a total lunar eclipse is the most dramatic of all lunar eclipses and presents an exciting photographic opportunity for any aspiring photographer or would-be astronomers.

“A lunar eclipse is a rare cosmic sight. For centuries these events have inspired wonder, interest and sometimes fear amongst observers. Of course, if you are lucky to be around when one occurs, you would want to capture it all on camera,” says Dana Eitzen, Corporate and Marketing Communications Executive at Canon South Africa.

Canon ambassador and acclaimed landscape photographer David Noton has provided his top tips to keep in mind when photographing this occasion.   In South Africa, the eclipse will be visible from about 19h14 on Friday, 27 July until 01h28 on the Saturday morning. The lunar eclipse will see the light from the sun blocked by the earth as it passes in front of the moon. The moon will turn red because of an effect known as Rayleigh Scattering, where bands of green and violet light become filtered through the atmosphere.

A partial eclipse will begin at 20h24 when the moon will start to turn red. The total eclipse begins at about 21h30 when the moon is completely red. The eclipse reaches its maximum at 22h21 when the moon is closest to the centre of the shadow.

David Noton advises:

  1. Download the right apps to be in-the-know

The sun’s position in the sky at any given time of day varies massively with latitude and season. That is not the case with the moon as its passage through the heavens is governed by its complex elliptical orbit of the earth. That orbit results in monthly, rather than seasonal variations, as the moon moves through its lunar cycle. The result is big differences in the timing of its appearance and its trajectory through the sky. Luckily, we no longer need to rely on weight tables to consult the behaviour of the moon, we can simply download an app on to our phone. The Photographer’s Ephemeris is useful for giving moonrise and moonset times, bearings and phases; while the Photopills app gives comprehensive information on the position of the moon in our sky.  Armed with these two apps, I’m planning to shoot the Blood Moon rising in Dorset, England. I’m aiming to capture the moon within the first fifteen minutes of moonrise so I can catch it low in the sky and juxtapose it against an object on the horizon line for scale – this could be as simple as a tree on a hill.

 

  1. Invest in a lens with optimal zoom  

On the 27th July, one of the key challenges we’ll face is shooting the moon large in the frame so we can see every crater on the asteroid pockmarked surface. It’s a task normally reserved for astronomers with super powerful telescopes, but if you’ve got a long telephoto lens on a full frame DSLR with around 600 mm of focal length, it can be done, depending on the composition. I will be using the Canon EOS 5D Mark IV with an EF 200-400mm f/4L IS USM Ext. 1.4 x lens.

  1. Use a tripod to capture the intimate details

As you frame up your shot, one thing will become immediately apparent; lunar tracking is incredibly challenging as the moon moves through the sky surprisingly quickly. As you’ll be using a long lens for this shoot, it’s important to invest in a sturdy tripod to help capture the best possible image. Although it will be tempting to take the shot by hand, it’s important to remember that your subject is over 384,000km away from you and even with a high shutter speed, the slightest of movements will become exaggerated.

  1. Integrate the moon into your landscape

Whilst images of the moon large in the frame can be beautifully detailed, they are essentially astronomical in their appeal. Personally, I’m far more drawn to using the lunar allure as an element in my landscapes, or using the moonlight as a light source. The latter is difficult, as the amount of light the moon reflects is tiny, whilst the lunar surface is so bright by comparison. Up to now, night photography meant long, long exposures but with cameras such as the Canon EOS-1D X Mark II and the Canon EOS 5D Mark IV now capable of astonishing low light performance, a whole new nocturnal world of opportunities has been opened to photographers.

  1. Master the shutter speed for your subject 

The most evocative and genuine use of the moon in landscape portraits results from situations when the light on the moon balances with the twilight in the surrounding sky. Such images have a subtle appeal, mood and believability.  By definition, any scene incorporating a medium or wide-angle view is going to render the moon as a tiny pin prick of light, but its presence will still be felt. Our eyes naturally gravitate to it, however insignificant it may seem. Of course, the issue of shutter speed is always there; too slow an exposure and all we’ll see is an unsightly lunar streak, even with a wide-angle lens.

 

On a clear night, mastering the shutter speed of your camera is integral to capturing the moon – exposing at 1/250 sec @ f8 ISO 100 (depending on focal length) is what you’ll need to stop the motion from blurring and if you are to get the technique right, with the high quality of cameras such as the Canon EOS 5DS R, you might even be able to see the twelve cameras that were left up there by NASA in the 60’s!

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How Africa can embrace AI

Currently, no African country is among the top 10 countries expected to benefit most from AI and automation. But, the continent has the potential to catch up with the rest of world if we act fast, says ZOAIB HOOSEN, Microsoft Managing Director.

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To play catch up, we must take advantage of our best and most powerful resource – our human capital. According to a report by the World Economic Forum (WEF), more than 60 percent of the population in sub-Saharan Africa is under the age of 25.

These are the people who are poised to create a future where humans and AI can work together for the good of society. In fact, the most recent WEF Global Shapers survey found that almost 80 percent of youth believe technology like AI is creating jobs rather than destroying them.

Staying ahead of the trends to stay employed

AI developments are expected to impact existing jobs, as AI can replicate certain activities at greater speed and scale. In some areas, AI could learn faster than humans, if not yet as deeply.

According to Gartner, while AI will improve the productivity of many jobs and create millions more new positions, it could impact many others. The simpler and less creative the job, the earlier, a bot for example, could replace it.

It’s important to stay ahead of the trends and find opportunities to expand our knowledge and skills while learning how to work more closely and symbiotically with technology.

Another global study by Accenture, found that the adoption of AI will create several new job categories requiring important and yet surprising skills. These include trainers, who are tasked with teaching AI systems how to perform; explainers, who bridge the gap between technologist and business leader; and sustainers, who ensure that AI systems are operating as designed.

It’s clear that successfully integrating human intelligence with AI, so they co-exist in a two-way learning relationship, will become more critical than ever.

Combining STEM with the arts

Young people have a leg up on those already in the working world because they can easily develop the necessary skills for these new roles. It’s therefore essential that our education system constantly evolves to equip youth with the right skills and way of thinking to be successful in jobs that may not even exist yet.

As the division of tasks between man and machine changes, we must re-evaluate the type of knowledge and skills imparted to future generations.

For example, technical skills will be required to design and implement AI systems, but interpersonal skills, creativity and emotional intelligence will also become crucial in giving humans an advantage over machines.

“At one level, AI will require that even more people specialise in digital skills and data science. But skilling-up for an AI-powered world involves more than science, technology, engineering and math. As computers behave more like humans, the social sciences and humanities will become even more important. Languages, art, history, economics, ethics, philosophy, psychology and human development courses can teach critical, philosophical and ethics-based skills that will be instrumental in the development and management of AI solutions.” This is according to Microsoft president, Brad Smith, and EVP of AI and research, Harry Shum, who recently authored the book “The Future Computed”, which primarily deals with AI and its role in society.

Interestingly, institutions like Stanford University are already implementing this forward-thinking approach. The university offers a programme called CS+X, which integrates its computer science degree with humanities degrees, resulting in a Bachelor of Arts and Science qualification.

Revisiting laws and regulation

For this type of evolution to happen, the onus is on policy makers to revisit current laws and even bring in new regulations. Policy makers need to identify the groups most at risk of losing their jobs and create strategies to reintegrate them into the economy.

Simultaneously, though AI could be hugely beneficial in areas such as curbing poor access to healthcare and improving diagnoses for example, physicians may avoid using this technology for fear of malpractice. To avoid this, we need regulation that closes the gap between the pace of technological change and that of regulatory response. It will also become essential to develop a code of ethics for this new ecosystem.

Preparing for the future

With the recent convergence of a transformative set of technologies, economies are entering a period in which AI has the potential overcome physical limitations and open up new sources of value and growth.

To avoid missing out on this opportunity, policy makers and business leaders must prepare for, and work toward, a future with AI. We must do so not with the idea that AI is simply another productivity enhancer. Rather, we must see AI as the tool that can transform our thinking about how growth is created.

It comes down to a choice of our people and economies being part of the technological disruption, or being left behind.

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