Recent surveys and studies covering the banking sector tell us that bank branch traffic has dropped by more than 60% over the last several years and that the contingent of consumers requiring a physical location continues to go down. One major reason for this is that more and more consumers prefer the simplicity and availability of digital banking apps and the transactions that can take place using digital technology.
At the same time, banks and credit unions are beginning to understand how internal and external insights can improve customer engagement and personalize experiences. From transactional insights to purchase data and social media interactions, financial institutions are leveraging real-time insights and new communication channels to connect with customers and members at the time of need. For instance, channels such as Facebook, Instagram and even YouTube are being leveraged to help organizations meet expectations more quickly and less expensively.
To succeed, banks and credit unions need to leverage data from all sources and channels. This includes everything from online banking apps and mobile devices to ATMs and branch engagement. The goal is to create a contextual data repository that can drive highly personalized engagement in real-time.
This is what contextual banking is all about. Contextual banking refers to the interrelated factors of customer insights and environmental conditions that make digital banking experiences more relevant. Done well, banks and credit unions not only have the ability to know a consumer’s financial profile, including services held and channels used, but what they may be browsing on your website, shopping for online or discussing with others. Moreover, you will be able to better understand financial needs … instantly.
With real-time consumer context, financial institutions potentially offer personalized offers and enhanced experiences before the consumer even realizes the need themselves.
- Power of Customer Insights Will Separate Digital Banking Winners & Losers
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Components of Contextual Banking
Contextual banking is the foundation for providing the personalized, ongoing, omnichannel, unique, and seamless experiences wanted by consumers and talked about by bankers and credit union executives. Contextual banking includes current data and historical data, providing you with an overarching view of who your customers and members are and where they are in their customer journey. The insights derived from this data and the analytics that follow provide the basis for response to any consumer action or request – across all channels.
This may include routing calls made to a call center to the most qualified agent based on contextual data, or delivering a text message at the exact time of a consumer’s need.
Some of the most basic components of contextual banking include:
- Time of day
- Channel preference
- Product usage history (including payments)
- Past behaviors
- Web search history (when and where)
Recognizing and reacting to a customer’s micro-moments requires a confluence of contextual data, across channels that will provide relevance.
Benefits of Contextual Banking
The benefit of contextual banking are pretty straight forward. Marketing before context was product-centric while contextual marketing is customer-centric. Put another way, contextual banking is:
- Flexible. Customers want to use various channels, but they also want each channel to provide a connected, seamless experience. Continuity of a customer experience requires sharing of data as well as access to data across channels. Deeper insight into the customer’s preferred way of communication at each stage of the customer journey gives us an idea of how the customer behaves on each channel, giving us tips on how to best deal with them and optimize their experience. The key is flexible continuity.
- Fast. Advanced technology provides users like sales or call center reps with customer data from seconds, weeks, months and years prior … immediately. This creates a better experience where the customer doesn’t need to repeat information over and over. The Harvard Business Review also found that companies that follow up within the first hour are 60 times more likely to qualify a lead than companies that wait for a day to contact a prospect. In other words, context and speed lead to improved sales and revenues.
- Seamless. Context proves valuable in decreasing customer effort and increasing simplicity from the consumer’s perspective. When you know the customer, their history with your organization, and their needs and behaviors from big data, you have the power to improve their experience.
- Proactive. Context can predict where the customer may go next on their engagement journey and the response that we should provide. This can assist in predicting customer support calls, offering advice, recommending product solutions and guiding channel use. And because the context is available in real-time, it can be used during transactions or engagement to enhance the conversation and highlight opportunities.
Contextual Banking and the Customer Experience
According to SAS, “The foundational tenet of customer experience is that the cumulative impact of interactions over time, many of which occur outside of traditional campaign boundaries, determine a customer’s feeling of real relationship with an organization.” It is therefore an organization’s responsibility to identify and use the context of ongoing interactions to create a repeatable cycle of connections, foster deep engagement, and apply what is learned during the process to make future interactions equally engaging.
Capitalizing on moments of truth during the customer journey requires that we shift our focus from simply understanding which offer and which channel the customer may want, to understanding the context of a customer’s interaction – what is their intent, how can we build engagement, and how can we provide added value?
Participants in a Forbes Insights Study, sponsored by SAS, reported many positive impacts from using analytics to optimize data-driven experience initiatives.
To deliver contextual results requires a robust technology platform. Optimizing a close to infinite combination of personalized offers at scale against complex constraints and objectives makes this mission even more complex. To deliver on these requirements, SAS recommends that your marketing technology ecosystem should include:
- Marketing automation. Automation significantly reduces the time required to develop the large number of campaigns and targeted offers required to feed a contextual banking communication program. This automation platform should include the ability to develop sophisticated predictive analytics and models, access online and offline data, incorporate data management processes needed to ensure high-quality data, and design and schedule campaigns for a multitude of communication channels.
- Marketing optimization. Optimization engines use sophisticated analytics to direct a multitude of business constraints, complex contact strategies and multiple delivery channels to achieve specific business objectives. What-if scenario modeling to understand the impact of changing constraints and objectives must be easy to execute. The technology should be able to handle significant amounts of data and complex calculations in real time to respond to opportunities immediately.
- Real-time decision making and event detection. The technology platform should be able to detect key customer events, balance algorithmic optimization with business rules, and deliver the highest-priority results to multiple channels in real time.
Consumers already enjoy the benefits of contextual engagement from high tech leaders, major retailers, and other industries that are using interaction data and sophisticated real-time communications and decision-making to deliver contextual experiences.
The banking industry must follow this lead.