Creating a Customer-Centric Model in the Post-COVID Era

By Emilio Valdes, SVP EMEA & LATAM, Informatica 

With businesses across the globe forced to transform themselves overnight at the start of the pandemic, customer service and satisfaction for banks and financial services institutions have become the new battleground. Customers today expect the organisations they use to understand their growing needs and preferences whilst delivering an exceptional customer experience at every step of the journey, from discovery to transaction. As a result, financial institutions are actively striving to offer a seamless experience through a smart balance of human workers and machines.

Financial institutions need to gain deeper insights into customer behaviour and sentiment. This helps develop tailored products and services that deliver those offers with a personalised message through the right channel at the right time. To help them achieve this, organisations are upgrading back-office technology, including core banking systems, payment platforms and marketing solutions. They are also adopting agile computing and partnering with innovative Fintech startups to not only differentiate themselves from the competition but to survive in today’s hyper digital and open banking-driven industry. Businesses are also modernising their analytics capabilities, hiring certified data scientists, adopting artificial intelligence (AI) and machine learning (ML) technologies and building out new cloud data warehouses and data lakes to achieve deeper and more actionable insights.

But whilst digital transformation and investment in analytics are important, many of these customer experience investments will struggle to deliver business value due to long-standing gaps in how banks integrate, manage, govern and protect their most valuable asset – their data.

Data as a Business Imperative

COVID-19 accelerated the need to be more digital and data-driven when interacting, servicing and performing transactions with customers. As digital interactions have quickly become the standard, consumers demand a more personalised and customised experience from organisations they do business with. Businesses need to react in response to their customers’ evolving needs, while also planning ahead for what will become the customer-centric model in a post-COVID world.

By harnessing the power of data through AI and advanced analytics, financial institutions can gain a holistic understanding of their customers and the current and future state of their business relationships. For example, Greater Bank of Australia set a goal of completely transitioning to the cloud in less than two years, putting its data strategy at the centre of that transformation. The bank deployed an enterprise data catalogue to discover and move data at speed to feed internal and external reporting. This, in turn, will enable a wider use of a data analytics platform on Google Cloud.

Thanks to its cloud-native and AI-driven approach, its been successful with driving greater business value through secure open banking and improved customer service. By creating more meaningful engagement, Greater Bank can offer its customers the right product or service at the right time. It’s no surprise the organisation is continuously recognised by financial bodies for being a leader in banking services and customer relations.

The Rise of Digital

Whilst digital banking has been around for many years, the adoption of mobile banking has given way to digital and contactless banking becoming a new way of life, and this behaviour will continue. According to the McKinsey Global Banking Annual Review1, customer interest in digital banking is on the rise in many markets. In the UK and the United States, 10-15% of consumers are more interested in digital banking than they were before the pandemic; and in some markets like Mexico and Singapore, that number jumps to 30-40%. This means that financial institutions will need to kick their digital transformation initiatives into high gear to keep up with increased demand.

Take Union Bank of the Philippines (UnionBank) for example. UnionBank, a digital pioneer which launched the first banking website in the Philippines in 1999, plans to become a purely digital bank within two years. It will accomplish this by empowering its customers through digital services on their mobile devices. This is prime evidence of data security and privacy playing an important role in delivering a seamless customer experience.

For UnionBank, to ensure digital banking remains secure, it will need to compile and maintain complete and accurate personal data for each of its customers, including names, addresses, contact details, nationality and date and place of birth. Customer data is also needed to support the bank’s know-your-customer initiatives to identify cross- and upsell opportunities for financial products such as loans, as well as to better manage fraud risk. Additionally, UnionBank must comply with the Anti-Money Laundering Act of 2001 (AMLA), which requires banks in the Philippines to report covered (large) and suspicious transactions within five days to identify potential money laundering activities. As UnionBank brings on more customers and more deposit accounts, it needs to be certain it can continue to meet AMLA reporting timelines and accelerate them if at all possible, while avoiding the pitfalls of “dirty data”.

Bringing it to Life

To meet these requirements, the UnionBank strategy is to leverage increasing mobile penetration in the Philippines and use digital as the cornerstone for reaching more customers and growing deposits and revenue. But like all banks, especially those that serve emerging markets, it recognises the need to identify and solve any data quality challenges so efforts don’t go to waste.

By leveraging a master data management solution and building what is essentially a “golden record” for customer data – and then automating data cleansing to ensure data quality – UnionBank has been able to establish a single, trusted view of each customer that is consistent across platforms. This gives the organisation the operational capability to monitor the overall health of its customer information to proactively manage risks to data integrity. UnionBank has been successful in improving data quality from 35% to 100% in just one year, increasing cross-sell and up-sell opportunities with customers whilst helping the bank prevent money laundering activities. It is also accelerating the loan approval process from weeks to minutes, further improving customer service and getting revenue on the books faster. Because it has the “golden record”, it knows if a customer is in good standing and can approve a loan in less than three minutes. Because UnionBank is better able to serve its customers, its online user base has been growing rapidly.

A Look Ahead

Like so many industries, the financial services sector continues to grapple with a challenging business environment in the wake of the pandemic. Historically low interest rates combined with a highly commoditised industry packed with competitors has emphasised the importance of customer experience. Financial institutions of all sizes will continue to accelerate their digital transformation investments to modernise applications and analytics at a rapid pace. As important as these initiatives are, these investments will struggle to operate and deliver business value if the underlying data required in these systems is not fit for use. Any organisation that struggles with the accessibility, quality and usability of their data must consider addressing them with smart investments to improve how they manage, govern and use data for customer experience success.

1McKinsey & Company, “Global Banking Annual Review 2020: A test of resilience: Banking through the crisis, and beyond,” 12/9/20