Better Service in Banking Begins with Deeper Data Analytics

Listening to consumers when they visited the branch was the old-school way of financial institutions finding out what people considered important and what they really needed. Technology has changed the business, but 4 steps for finding out what consumers want reveals that the fundamentals still fit.

My first position at my local community bank was that of curious observer.

I assumed this important role at the age of six. It was a byproduct of having a mother who was a teller at the community bank in our small town. Each day after school when the bank had closed for business and the customers had gone, I would sneak behind “teller row” to be in the middle of the action.

Yet, as interesting as it was to watch the flurry of work taking place around me and seeing the giant vault locked for the night, what I relished most was the interesting conversation and chatter of the employees as they shared observations, concerns and opportunities from the day’s interactions with customers.

Being on the front line of the bank — literally — meant these men and women knew who was buying a home, opening a business, retiring, sending a child to college and much more.

Technology Changed, But Financial Marketers’ Needs Remain Familiar

That was advanced analytics decades ago, which drove grassroots one-to-one marketing campaigns that were launched in a curated, contextual, even personalized way.

I’ve spent a quarter century in banking, and much has stayed the same in concept, though technology has influenced how banking institutions communicate with consumers. Consider:

  • Constant connectivity to mobile devices introduced the potential for geo-location data insights.
  • Interacting on social media introduced potential for personal behavior and preference data insights.
  • New behavior trends can be extrapolated from our migration to online shopping for groceries, household items, dinner and everything in between.

All that activity is creating a digital profile of us as consumers, our households and our lives. When a financial institution is able to merge what they already know about a consumer or household (such as frequency and amount of payroll deposits, rent or mortgage payments, any additional savings we may have accumulated or invested) with that digital profile, it creates an insight-rich foundation for more engaging experiences than ever before.

By leaning into the power of data and analytics, banks and credit unions can accomplish great things for growth and sustainability of consumer households and communities. Institutions that choose customer empowerment by engaging digitally and forming strategic partnerships that supplement native data with external consumer-level insights will emerge as the winners.

Safeguarding relationships and prospects with consumer segments who are digital natives is paramount. They represent your institution’s future and are just beginning to build their financial profile.

The key with data is to think of it as a conversation; what can you learn, and what can you convey? I’ve never lost that curious nature I had as a child, or the skill of building relationships through understanding that I learnt in my first days at a bank. So, think of that wide eyed six-year-old sneaking behind teller row and ask yourself “How can I be more curious”?

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Data Analytics Becomes Institutions’ New Age Marketing Weapon

Innovations in data-driven insights and technology mean incredible engagements now come from bringing the financial institution to the consumer as opposed to relying on bringing the consumer to the institution.

Today, data collection and the power of advanced analytics to make data more actionable has emerged as the “new school” secret sauce for financial marketers. It creates engagements that are high impact, low-cost and completely scalable. Additionally, engagements and transactions can be rendered more secure as real-time data is leveraged to shine a light into risk areas that were “blind spots” before.

Personally, one of the most exciting outcomes of this trend is the ability to leverage these advancements to lower the costs of acquisition and servicing. This shift enables financial institutions of all sizes to reach new customer segments for organic growth, increasing access to safe and affordable products and services to low- and moderate-income segments that are often relegated to alternative providers.

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4 Steps to Starting to Improve Your Use of Data

Of course, no one solution fits all institutions. However, there are some basic starting blocks which any financial institution, regardless of size, can implement to start using data better:

1. Start supplementing the financial data you have with other external sources of data.

This will help your institution to build a more well-rounded view of your customer and their household. This can come from national or global studies such as those from the Pew Research Center or The Center for Financial Inclusion, to combine macro insights with your local knowledge.

2. Look beyond the “dollars and cents” in your transactional data.

Understanding the types of financial commitments consumers have, data such as how they shop and trends around frequency, average purchase size, and use of credit can be great indicators of preferences and habits that enable personalized and contextual offers and communications.

3. Look across portfolios for indicators of similar interest or commonalities that can be gleaned from transactional data.

The pandemic in many ways was a great leveler. COVID-19 demonstrated that different customer segments are more alike than they are different in their banking behaviors. With further analysis, you may find new affinity banking segments emerge that can complement your overarching strategy.

4. Accelerate your digital onboarding and engagement strategy.

This comes back to more “old school measurements” such as customer effort score (CES) or net promoter score (NPS) — what are people saying about the way you deliver services? Digitally native consumers’ needs for more complex and profitable products and services will transition quickly.

If you aren’t enabling onboarding and engagement in a fully digital manner, the risks of being left behind are higher than ever before.

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