SMAC IN FINANCIAL SECTOR

With the confluence of innovative technologies, we are entering into a new landscape with a
plethora of fresher and better possibilities, a time-space which we know of as the Post-Digital
era.

The evolution in the area of technology has changed the face of business. Dynamics like social
media, mobility, analytics and cloud computing have collaboratively boosted the
fundamentals of business infrastructure, adding to the deftness within the enterprise and in
the market.

To highlight the incorporation of the aforementioned enablers of technology, the IT industry

has come up with a new concept which has become the buzzword of today, ‘SMAC’- an
acronym for Social, Mobile, Analytics and Cloud.

The buzz word in the industry today is BIG DATA . Be it fmcg sector , manufacturing sector
,financial sector etc. Big Data is high volume; high velocity and high variety information assets
that require new forms of processing to enable enhanced decision making, insight, discovery,
and process optimization.

FINANCIAL SECTOR

Use of Big Data in pro-actively identifying, understanding and managing financial and
operational risk can enable us to be more risk- aware, and ensure confident decision making
at all levels in the organization. The applicability of Big Data in Capital Markets has opened up
significant opportunities for the industry. Some of the examples are:

1. Credit Risk: Big Data empowers bank with better predictive power, detect early
warning signals by observing client’s ongoing behavior and take corrective action in
time. We can develop risk profiles of new customers based on range of data including
customer credit reports, spending habits, social media profiles and credit card
repayment rates in a matter of seconds
2. Market Risk: Big data helps in complex credit counter party risk quantification,
improved balance sheet optimization, and collateral management including real time
exposure simulation for new client trades and market prices volatility changes
3. Operational Risk: Big data helps in enhancing trading surveillance controls and prevent
frauds and forgeries in dealing rooms. It enables retrieval of instant snapshot of dealer
 activity including information from mobile phones, chat room sites and even door
swipe cards.
4. Regulatory Risk: Big Data provides real time actionable insights that can improve the
existing process in Anti Money laundering and allow for advanced statistical analysis of
structured data and advanced visualization and statistical text mining of unstructured
data. It can quickly draw hidden links between transactions and uncover suspicious
transaction patterns.

While on one hand, they are using mobile technologies to create a competitive edge, on the
other they are set to explore the world of social media and analytics, which they believe has
the power to garner new business and serve customers better.
The social universe
Social media is a relatively new area for banks in India. Banks are seen experimenting with
various social media channels to build their brand equity, gauge which stream will actually
yield more visibility and help promote the organizations’ image, says the report.
As compared to public sector banks, private sector and foreign banks have adopted social
media more openly and integrated it as a part of their strategy. Nearly 63% of respondents
have used social media campaigns quite frequently to get leads in the past one year. Over half
of them are using social media aggregators to help interpret unstructured data.
Mobility underway
Mobile banking has already created a buzz, despite experts pointing out various challenges
with this channel time and again. Currently almost all banks are using mobile to create a
competitive edge. Around 86% said that they had already deployed mobile banking and only
14% are still in the initial stages of the launch. “Mobile telephony has become ubiquitous,
with around three quarters of the population using mobile devices. It is a well acknowledged
fact that the mobile platform is being used to a large extent by customers,” says the report.
Mobile channel is currently used mostly for checking account details such as account balance,
mini statement and cheque status. But other transactions such as money transfers, utility
payments and mobile payments are also gaining prominence.
The report indicates that currently, around 78 banks in the country offer mobile banking
services in some form or the other. The use of smart phones and tablets has also helped
increase the traffic on mobile banking transactions

Finance and accounting roles have been one of the ‘early affected’ communities in the world
of automation, elimination of duplication, centralisation and standardisation, not to mention
‘labour arbitrage’. There was much debate on the topic that technology will be performing
ever more human jobs in the not so distant future – there’s even an app on the BBC site to
estimate what the likelihood of automation taking your job is! Whilst simplistic, it indicates
that a finance manager is quite unlikely (7%) to lose their job due to automation whilst an
accounting administration role is 97% likely to lose their job to automation .

Equally important as our technological capabilities is the need to hire and train a tech savvy
team who are comfortable adapting to this ever changing finance environment. Recruitment
is a big part of this, in particular attracting and retaining young talent from recent graduates.
The way the world conducts business is changing and changing fast. As a crucial part of the
success of businesses, finance needs to not only keep up with, but stay ahead of this trend.
As well as looking back and reporting on what happened, finance will be relied upon much
more to look forward to provide real time business advice and predictions. Automation and
process change will continue to be a central theme.