By Elton Gomes
As India is on the cusp of the fourth industrial revolution, many inroads have been made to harness the benefits of technology and science.
In the latest attempt to harness that potential, the Reserve Bank of India (RBI) has decided to set up a data sciences laboratory to use big data analytics in order to improve “its forecasting, nowcasting, surveillance and early-warning detection abilities that all aid policy formulation,” it announced in a press release last week.
What does the lab plan to do
The laboratory will employ professionals with skills in computer science, data analytics, statistics, economics, econometrics and finance and is expected to become operational by December 2018.
An RBI official told Live Mint the data sciences lab would be an independent division and it would be used to monitor inflation management, banking supervision, and financial inclusion, among a host of other services.
Why is the data sciences lab important
The basic importance of the data sciences lab is that it will be harnessing technology to improve the functioning of the RBI.
The lab can keep a tab on how prices are moving in real time and help the RBI spot red flags in inflationary pressures. In addition, by employing big data, banks can now use the information to assess real-time transaction behaviour of clients. Big data will also give banks an insight into spending habits of users, allowing them to tailor their services as per the needs of the clients.
With an effective data system in place, the RBI’s data lab could keep a check on malicious activity, thereby preventing significant losses.The use of big data can allow the RBI to streamline their work process. thereby identifying and even solving problems.
India is preparing itself to delve into employing technology in every sphere, and the RBI’s attempt to update itself could be a significant step in employing big data in the banking sector.