Russia’s TCS bank turns to big data to create value
Clever use of data about customers can be the key to success as customers move from cash to cards, according to Oliver Hughes, chief executive at Russian bank Tinkoff Credit Systems.
TCS was founded by Oleg Tinkov, a former soviet coal miner who became an entrepreneur and established five different businesses. Headed by Hughes, his latest venture is an online bank that currently has 3.5 million customers for its credit card business in Russia. The company uses its mastery of data about customers to make decisions – and to provide security.
“We build an online behaviour profile of customers,” said Hughes. “We look at the customer’s search profile and history, their social media interaction, their payment history, their device type and browser. This information tells us a lot about their risk. We can even see where they put the cursor on our website.”
The company can also tell where the customer came from when viewing the TCS website – whether they arrived via search engine, referral or marketing. The information comes partly from the Russian Credit Bureau – especially the payment history. The information is used to score customers. They even check with employers to verify how much the potential customer earns.
“We know the expected value of the customer over the life of the relationship,” he said. “We calculate that against the probability ot default to make decision about whether the customer is worthwhile.”
When delivering a new card, TCS can deliver even to the far-eastern Russian city of Vladivostok in two working days. It uses a courier service, with the couriers using an in-house Android app that organises their agenda, and allows the company to keep track of their location and productivity. On arrival, documents are signed and photographed and uploaded via the app straight into the firm’s CRM.
TCS has no physical branches anywhere; instead it focuses on offering mobile and internet banking. Drawing on the country’s relative lack of competition – Hughes estimates that some 40% of the firm’s customers live in the smaller Russian cities, where the existing banking options are often very limited – Hughes wants to use advanced technology to out-compete the local banks.
The bank plans to launch an e-wallet by the end of the year, with an emphasis on payments and peer to peer payments on the mobile. It has also bought an insurer and has an e-commerce business. In addition, it is testing a voice recognition system, which it says will help build a digital bank of voice prints that can then be used to improve security while reducing lengthy authentication procedures for the customer.
“Using data wisely can help lower your risk, and get a greater response from potential customers,” said Hughes. “We can enhance the customer experience and at the same time use our expertise in data to build a solid, secure business.”