The Role of Data in a Rapidly Evolving Sector

Harnessing Data for Success in the Evolving Banking Landscape

By Andrew Stephenson, Director of Marketing, EMEA, Treasure Data

The global pandemic has undoubtedly helped to break the inertia of digital adoption, but now, banks risk sitting on a gold mine of untapped data about their customers, unable to translate those data points into high quality customer experiences.

Retail banks typically have millions of customer data points across multiple departments such as finance, credit, real estate, and business. Fast-forward to the pandemic, and with banks rapidly transforming to accommodate digital services, that pool of data has grown exponentially. Therefore, it’s never been more important to ensure that the banking sector has robust data strategies in place.

A rapidly evolving external environment paired with unprecedentedly unpredictable consumer behaviour, has led many banks to pivot on everything from price to product. And as banks recover from the pandemic, they are battling for customer loyalty at a time when it can be easily damaged because of poor data management, resulting in unsatisfactory customer experiences.

Data strategies will provide banks with a comprehensive unified view of changing consumer needs and the tools to demonstrate that customer data is being used carefully and effectively to create positive experiences that keep consumers on side.

So how can those working in the sector gain a truly holistic view of customers, and provide the service that they expect and require? It all comes down to the following….

• Connect offline and online data

A customer that may have once regularly visited a specific bank for the past 15 years, might now prefer to use online services because of the pandemic.

This matters because banks have been able to build personal relationships with their customers at their branches for many years, and in doing so, have built up an understanding of the person and their needs.

But if that customer moves online, banks risk alienating customers unless they can replicate the kind of attention to the needs of the individual that the customer expects at branches. For example, if a customer decides to renew a line of credit online, but the bank demands the same burdensome paperwork as it requires of any other applicant, that’s exactly the kind of experience that will turn customers away and encourage them to seek alternative banking solutions.

The ability to connect online and offline customer data, to offer different products and services that match each individual’s situation, based on insights from unified customer profiles, will be critical to retaining and reconnecting with customers.

• Identify and eliminate data silos

Banks have the power to turn the data they already have into a competitive advantage, but only if they can use it efficiently and on a large scale. Open banking has already increased competition in the industry and gaining a unified view of the customer can be tricky, particularly because many traditional banks will be challenged by fragmented and heavily siloed stores of internal data.

The acceleration of digital banking services has led to an ever-growing data pool, spanning the entire organisation. But organisational silos risk undermining these comprehensive insights unless departments such as marketing and customer service correlate their customer information.

Without access to all available data, it’s impossible to have a truly holistic view of customers and provide the service they expect. Retail banks, for example, need to be able to collect detailed data from every source at their disposal including their branches, CRM, email lists, mobile apps, websites, as well as loyalty programmes and in some cases, external partners.

Communication and collaboration are key to unlocking insights hidden behind data blind spots. Businesses can double data’s value by eliminating silos or risk missing out on critical intelligence about their customers and operations.

• Tap into external triggers

External triggers can influence consumer behaviour as much as – if not more than – internal triggers, so banks must take them into account when making decisions.

Turning a blind eye to external influences creates a far bigger data blind spot that could ever exist within an organisation and will hinder their ability to make intelligent decisions.

Understanding, for example, if university admissions are on the rise, this could be a signal for banks to explore options to provide customers, who also happen to be parents of university age children, with specialised savings opportunities, in anticipation of their children leaving home.

Banks must ensure they’re factoring all relevant data points – both internal and external – into their decision-making process.

Capitalising on the data rush in the banking sector

Solutions incorporating customer data technology can help banks to thrive in a personalisation-driven world.

That’s because these technology solutions can not only create unified customer data profiles for targeting, segmentation, and personalisation but can also serve as the key to efficient data privacy compliance – a key consideration in a highly regulated industry such as banking.

As we look towards the future and adapt to post-pandemic behaviours, banks must consider the role that data plays in their post-pandemic success. Unless banks equip themselves with the tools to master value-added personalisation, they risk undermining the opportunity to differentiate within the market, attract new customers, and ultimately will lose the competitive advantage.