New research: How data, machine learning and AI enable Shared-value Banking
25 April 2024
Growing a business and staying ahead in industries are practically impossible without investing in data technology. Data is, today, one of the most valued business commodities to improve on the client experience and create new opportunities. Machine learning and AI are crucial for the efficient use of data to create and share value with Discovery Bank clients.
In a new case study between Discovery Bank and global data and AI company Databricks , the outcomes of the two companies' partnership in leveraging data, machine learning and AI to drive value for customers, the business and society are explored. Launched in 2019, Discovery Bank is built to transform banking in South Africa through its shared value banking model - by incentivising and empowering clients to cultivate positive financial habits, the bank creates a virtuous cycle wherein clients, the bank, and society at large benefit. Using the Databricks Data Intelligence Platform, a Platform powering more than 10,000 organisations worldwide including more than 50% of the Fortune 500, Discovery Bank is combining data and actuarial science with behavioural economics, AI, and ML to create data products and hyper-personalised experiences that reward healthy banking and lower financial risk.
Commenting on the Databricks case study, Hylton Kallner, CEO of Discovery Bank says, "A data-driven approach and advanced analytics capabilities are essential enablers of our model, which is built on a granular understanding of customer behaviour and its effects on risk and profit. In order to enable and rapidly scale this model, we have teamed up with Databricks for their expertise in data and AI platform innovation to embed data-centric products and data-driven decisioning across our company. Leveraging data, machine learning (ML) and generative AI (GenAI) capabilities has allowed us to hyper-personalise products and client interactions, transform our service approach, and significantly enhance our actuarial capabilities, risk management and fraud detection."
Dael Williamson, Field CTO of Databricks, comments, "Today, data and AI are transforming every industry. Databricks is dedicated to shaping the future through cutting-edge data and AI solutions and a commitment to data-driven excellence. This paper highlights the partnership between Databricks and Discovery Bank. With the Databricks Data Intelligence Platform for Financial Services, Discovery Bank accelerates data analytics and AI to drive business value, streamline governance and automate complex tasks. Our joint efforts demonstrate how data can drive transformation and add value to society. Discovery Bank's use of advanced AI and focus on data underscores its unwavering dedication to offering innovative financial tools and contributing to a brighter future for everyone."
The use of data and technology has been transformative
The Databricks Data Intelligence Platform (DI Platform) - which combines the power of Databricks lakehouse architecture with generative AI - allows Discovery Bank to integrate data processors, advanced machine learning (ML) models, complex actuarial models, and generative AI capabilities with streamlined governance. This partnership has empowered Discovery Bank to rapidly advance actuarial modelling, risk management, personalisation, servicing, and fraud approaches, yielding a significant return on investment of more than 500%.
- Hyper-personalisation: Discovery Bank can condense hyper-personalised and complex client behavioural information to support the client's progression toward healthy financial habits. With this personalisation, client interactions are tailored making these initiatives 80% more effective.
- Client financial health: Clients are guided toward better financial habits through data-driven insights, resulting in up to a fivefold increase in clients taking positive actions.
- Actuarial modelling: Discovery Bank leverages more personalised data within pricing, risk assessment, and business monitoring, ensuring a focus on the generation of shared value.
- Client servicing: Integration of personalisation and generative AI into client servicing, guiding agents with data-driven insights to improve clients' financial health and the client experience.
- Fraud prevention: With behavioural data and personalisation, the Bank enhances fraud monitoring and response to keep clients safe.
This case study provides a comprehensive review of how the Databricks Platform empowers Discovery Bank in building a data ecosystem that is focused on driving shared value. It delves deeper into the impacts of data, machine learning and AI technologies in delivering the benefits of Shared-value Banking to Discovery Bank clients. Read the paper 'The new paradigm for disruptive innovation in banking' here.