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More banks using big data technology in Singapore

Big data technology -- or the ability to process vast amounts of information -- is increasingly being tapped by businesses and governments.

SINGAPORE: Big data technology -- or the ability to process vast amounts of information -- is increasingly being tapped by businesses and governments.

The banking sector, including the two biggest banks DBS and OCBC, is among the first movers in this space in Singapore.

With over 25 million transactions a month, DBS has one of the busiest ATM networks in the world, with some of the busiest machines found in Ang Mo Kio.

To cope with the traffic, the bank uses data analytics.

It said it is the first in the world to analyse real-time ATM data and convert this into a plan for ATM cash reloading.

"We achieved 80 per cent reduction in the (number of) instances where ATMs run out of cash. This obviously translates into a very positive customer experience because customers get money when they want to get money,” said Nimish Panchmatia, managing director of Consumer Banking’s technology and operations at DBS Bank.

“The second thing we achieved -- we were able to remove 30,000 hours of customer wait time per annum by loading the machines when customers weren't using them, therefore customers didn't have to queue up behind the loading people.

“The third thing we achieved out of this was we achieved 20 per cent reduction in the number of trips. This obviously increases our efficiency and reduces our cost.

“The banking world is changing. As our CEO says, it's banking that's important and not banks. Customers want banking services, not banks necessarily. Other players are coming into the market -- non-banking players such as Alibaba and Google are now able to provide some form of banking services, so when you look at this whole space, it's transforming extremely quickly.

“The only way you're going to stay relevant is to really understand what the customer is doing... and one key (way to do this) is data analytics."

DBS also uses data analytics in marketing campaigns and in their customer service call centres.

It also recently inked a deal with IBM to use cloud-based technology in its wealth management business.

OCBC -- Singapore's number two bank -- is also using data analytics across all its businesses.

Over the last ten years, it has invested more than S$100 million in big data technology.

"All of our marketing campaigns are driven by data, and we run about 1,600 campaigns a year,” said Donald MacDonald, head of group customer analytics and decisioning at OCBC Bank.

“Last year, we generated around S$85 million in revenue from those marketing campaigns which is directly attributable to data and over 35 per cent of all new wealth management product sales, and over 30 per cent of all credit cards also come from the analytics. So it's a great contributor to our bottomline.

“There are certain situations now where you will interact with the bank, such as when you open an account down at one of our branches, and in real-time, we'll capture information about you, and we'll use that to learn, and make a (product) recommendation while you're still sitting in front of the staff member."

Data analytics has become a catchphrase in recent years. It has cropped up in the past two Budget Day speeches as the government encourages companies to raise productivity and tap into big data technology.

However, given that the technology is relatively new, there are lingering concerns over customer privacy and data security. Just last week, the Obama administration released a 79-page report, including guidelines on how customer information should be used.

The report was part of the Obama administration's response to the leaks by Edward Snowden, as the President promised reforms to intelligence community practices. 

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