How ICICI Bank is leveraging analytics to create differentiated value for stakeholders

Indian banks continue to lead the benchmark in creating unique technology solutions, and have often inspired other sectors to follow. A case in point is ICICI Bank, which has taken a number of digital initiatives which can set the trend for not only banks, but other companies too.

The bank has a huge focus on extensively leveraging data analytics and market intelligence to create strategies and unique value propositions across market segments. It uses insights gained from data analytics to facilitate better targeting, resourcing, channel and product alignment, capability building and marketing and alliances. The bank, for instance, was one of the first companies in India to leverage data analytics to introduce instant products. Using insights drawn from its data analytics tools, the bank is able to complete the credit assessment of customers online. This uses an intelligent combination of various financial parameters including the credit bureau information, relationship and vintage patterns with the bank to ascertain the credit-worthiness of a customer. Based on the credit score of the customer, the bank pre-approves the loan amount to customers which help them avail the loan at the time of purchase very quickly.

Leveraging data, the bank has introduced a bouquet of instant products including the country’s first instant credit card, insta personal loan, instant digital credit called PayLater, insta overdraft facility for MSMEs, instant opening of Public Provident Fund account facility, among others.

The drive to provide digital products and instant financial solutions to customers using data, has led to some unique product launches. ICICIStack, launched last year, is a comprehensive digital banking services and API platform to ensure uninterrupted banking experience to customers—retail and business including retailers, merchants, fintechs, large e-commerce firms, corporates—at a time when they are advised to stay indoors in the wake of the coronavirus outbreak. ‘ICICIStack’ offers nearly 500 services that covers almost all banking requirements of customers, in one place. The list includes digital account opening (instant savings and current account opening), loan solutions (instant personal loans, instant credit cards, instant home loan sanctions, instant car loans, instant overdraft facility, instant business loans), payment solutions (digital payment solutions like UPI, bill payments using Bharat Bill Payment System), investments (instant FD, PPF, NPS and AI led robo-advisory for other investments), insurance (term and health insurances digitally).

This year, the bank took another giant step, by announcing the launch of its ‘Merchant Stack’, a set of the country’s most comprehensive digital banking services specially curated for retail merchants. In this case too, the bank has used analytics effectively to create a unique offering. Pankaj Gadgil who heads the Self Employed Segment (covering the important segment of current account, cross border trade and business lending group) for ICICI Bank, explains the advantage of analytics by giving the example of the merchant overdraft feature in the Merchant Stack.

“The ‘Merchant Stack’ offers two instant credit facilities, based on POS transactions. The first one, called ‘Merchant Overdraft’ empowers pre-qualified merchants with a linked ICICI Bank POS machine to get upto Rs 25 lakh digitally, instantaneously and in a completely online and paperless manner. The facility leverages advanced data analytics at the bank to form a new scorecard with various parameters to assess the credit eligibility of merchants using their POS transactions. Traditionally, this is done by taking the financial documents or income statement from the customer or meet the customer physically. The documents given by the customer is analyzed to understand his credibility and also gauge the capability of the customer to repay in time. In the Merchant Overdraft feature, for credit assessment, what we have done is that using data analytics, we have been able to create a very specialized scorecard which analyzes the velocity and the value of the transactions of the merchant.” This new credit assessment method of the bank is a marked improvement over the traditional industry practice of using only bank statements, financial statements and income returns to offer working capital facilities. Once the overdraft limit is set up, merchants can start using the funds instantly to meet their working capital requirements. This offers significance convenience to borrowers as they no longer need to wait for few working days to avail an OD facility.

Today, with a huge physical network and robust digital platforms, ICICI Bank has created a strong foundation to get deeper insights into customer behavior and gain market share in a highly competitive marketplace.