ICICI Bank Stock Predictions: Replacing Security Questions With Voice Authentication Technology (IBN)

ICICI Bank Stock Predictions

ICICI Bank Stock Predictions
Elie Bursztein, an anti-abuse research lead, and Ilan Caron a software engineer posted on Google’s blog Thursday about the ridiculousness of security questions. The post names “New Research: Some Tough Questions for ‘Security Questions” discussed some of the major flaws of security questions and presented some interesting statistics. According to the research within 10 questions a hacker has an average 25% chance of guessing your answer correctly.

One of the most common questions is “what is your favorite food?”. A hacker would correctly guess the answer 20% of the time in his first guess if he tries Pizza on an English speakers account.  This is a serious issue as simple questions are easy to guess, and hard questions are often forgotten. For the banking sector security and authentication is a major factor – and on bank might have just found a good alternative to the outdated security questions.

ICICI Bank (NYSE: IBN) announced a solution which is not only simple, but a very strong catalyst for future growth. The bank has 4,050 branches and 12,642 ATM’s throughout India, making its largest private sector bank with consolidated total assets of US $ 132.17 billion at March 31, 2015.  The announcement today revealed a new service, voice recognized security authorization. It is pretty much as it sounds. When you call your voice is recorded using your personal “voice print”, which is comprised of over 100 characteristics unique to you. Algorithms then use your recording to authenticate your voice identity with your print and further improve it for your next call.

This kind of technology presents true forward thinking and could turn out to be a powerful cost saving mechanism. While in developed countries the average customer can, and is willing to do his banking through an online portal – this is less common in India. Using security authentication with pins, passwords, and of course the famous security questions is unsecure, slow, and inconvenient. It will be interesting to see how this plays out.

The bank saw its share price increase a staggering 60% in 2014; however, the stock price has so far declined 13% in 2015. This is largely caused by bad loans in reaching record highs as reported by Standard & Poor’s Indian arm. Troubled loans for ICICI Bank have increased to 3.8% of total advances in the 12 months ended March 31 from 3% percent a year earlier – an increase of over 25%. However, while the overall banking outlook is not bullish (but neither very bearish) the recent sell off has opened up and investment opportunity.

Algorithmic Analysis:

I Know First uses a powerful stock screening algorithm to analyze money flow between over 2000 assets and markets. The banking specific forecast looks at the correlation between the bank, competition, country market trend, global market trend, and investor tendencies regarding the stock.  ICICI Bank has proven historically to be harder to forecast than most bank stocks shown by the medium predictability of 0.32 (bottom number). However, right now it is the second best investment in the 3 Months horizon indicated by a strong banking sector signal of 18.54 (middle number).

ICICI Bank Stock Predictions

While in comparison to a cross industry forecast these signals are low, they are a good indication for those who are limited to the sector. ICICI bank recently suffered a strong devaluation, which according to the algorithm places it below its fair equilibrium price. The recent announcement for voice authentication not only demonstrates a positive innovative drive, but is going to make a lot of headlines – especially if successful. Sometimes this could be a strong enough driver to bring on a strong recovery, thus we would recommend ICICI bank as a strong banking stock choice for a 3 months to 1 year investment.