Have you ever thought about the amount of data a single person generates in a day? Every message they send, every online transaction they make, each time they post on social media – it all sums up to immeasurable bytes of data that forward-thinking businesses can combine and analyze to gain more information that better supports their company and improve how they serve their customers.
The banking industry is no exception. With banking products becoming increasingly commoditized, especially after the COVID-19 pandemic, big data and data analysis can help banks gain a strong edge that differentiates themselves from the competition.
In the Philippines, with over 75.6 million mobile phone users in the country, telco data is quickly becoming one of the best sources to gather alternative and valuable data about customers. Banks can capitalize on the valuable information that telco data provides to enhance customer experience, create better products, develop new sources of revenue, and improve the effectiveness of their current marketing strategies.
Here are the various benefits of telco data analytics in the banking sector.
A better understanding of customers = better customer service
Telco data analytics has a wide array of benefits, but it’s an especially helpful tool for industries that market themselves to customers as it’s an accurate way of segmenting your audience and customer base. For instance, millennial customers who consume huge amounts of mobile data in a month typically have vastly different needs from their banks, like mobile banking and the ability to top-up for virtual wallets, compared to baby boomers.
With telco data, you have an in-depth holistic picture of how each customer uses their mobile data. Banks can then quickly determine which segments are the most appropriate to target for specific products and services, strengthening the relationship with customers and ultimately increasing revenue.
Fraud risk prevention and management
The banking industry is built on risk, so every loan and investment requires a strict and thorough evaluation. Aside from looking into traditional data such as work tenure and source of funds, alternative sources of data such as telco data are powerful in assessing credit and fraud risk.
Alternative data like telco help banks gain deeper insight into a customer’s geo-locations, top used apps, frequently contacted cellphone numbers, and behavior on social media. These help banks detect fraudsters by helping them make smarter decisions when determining the creditworthiness of potential customers Geo-location fraud tools can also help break down the Internet’s defenses and barriers to anonymity, helping banks mitigate risk against fraud and other web-related security issues.
Ability to serve the unbanked and credit-invisible
Many consumers in the Philippines don’t have access to banking systems, making them credit invisible. As of 2020, over 51 million Filipino adults remain unbanked due to insufficient finances, lack of documentary requirements, and reluctance to open bank accounts. In turn, banks and other financial institutions can’t tap into the credit potential of the unbanked. With telco data, you have the power to close that gap.
By analyzing alternative data such as SMS, top 10 contacts list, top-ups, mobile data usage, and location, you can predict the overall creditworthiness of a user. Telco data can be used as a standalone model or in combination with existing traditional credit scoring data from credit bureaus. Telco data offers a unique data source for banks to address an uncharted market segment and gain deeper insights into the current market segment they serve.
Unleash the Power and Potential of Telco Data Analytics in the Banking Sector with FinScore
Telco data analytics provides banks with more marketing muscle. Areas such as risk prevention, marketing, and customer service can benefit greatly from telco data analytics and help banks remain competitive in the future.
Leverage the power of telco data with FinScore. We’re a leading financial technology company in the Philippines offering credit scoring platforms and fraud detection tools based on alternative data such as telco data. Our telco scoring model is built on over 400 telco variables derived from cutting-edge machine learning algorithms. We have successfully delivered over 3.5 million credit scores for our partner institutions.
We’ve helped other companies reap the benefits of big data and we can do the same for you. Contact FinScore today and gain deeper insight into your clients and borrowers.