Banking
The Transformative Force of First-Party Data in Banking
Global Banking & Finance Review®
Company
By Matthew Lubeck, VP EMEA atAmperity
In an era marked by digital transformation, traditional banking has moved existing experiences to a mobile app or website but hasn’t quite adapted to the digital evolution consumers need. With 67 per cent of banking customers in the UK now preferring digital banking over in-person experiences, this transformation provides financial institutions with a unique opportunity to use data to improve customer loyalty and drive growth.
While the shift to digital might not have created unique experiences for customers, it does mean that banks are sitting on a goldmine of untapped potential – first-party data that unlocks insights into customers’ needs and preferences. This data is the key to meeting consumers’ needs for improved digital experiences.
However, tapping into this immense amount of data and identifying ways to reap its benefits comes with challenges.
Below are some actionable insights that marketing leaders should consider as they look to maximise the impact of first-party data to remain competitive, serve customers and grow revenue.
Marketing teams at financial institutions must be aware that digital advertising is on the verge of a significant disruption due to the impending deprecation of third-party cookies. Traditionally, third-party cookies were the easiest way to secure customer insights and deliver results. However, these results will soon diminish, and marketing teams will be left to identify alternative ways to gather and act on customer preferences.
Without third-party cookies, banks will have limited access to customer data from external sources, making it harder to deliver personalised ads and marketing campaigns. Though third-party data collection is becoming a thing of the past, banks can invest more into gathering and organising customer data with their new tools and cutting-edge platforms.
By using data that customers provide willingly, such as transaction records, product and service usage data, credit histories and customer service trends, banks can ensure that their efforts remain effective and compliant with new privacy restrictions.
First-party data, when collected and used ethically and securely, allows financial institutions to optimise their marketing strategy and better serve their customers, even as limitations with third-party data become more prevalent.
Though the financial sector has tried to modernise for decades, many financial institutions still operate on legacy systems that are not well-equipped to handle the volume and complexity of customer data. These systems often create incomplete data, which results in fragmented customer journeys, inaccurate information and a lack of real-time insights to inform business decisions. Additionally, increasingly stringent regulations, such as the UK’s Data Protection Act and General Data Protection Regulation (GDPR), introduce an element of complexity for businesses to manage customer data and pose challenges in terms of data compliance.
Banks often rely on legacy systems for most processes, including marketing efforts. These outdated systems often hold back business growth and impede customer experience. Because of this changing landscape, if they haven’t done so already, banking leaders should consider investing in a Customer Data Platform (CDP). CDPs serve as invaluable tools for ensuring compliance with various data protection regulations, vital to enhancing both consumer trust and brand integrity. But beyond that, they allow marketers to aggregate and cleanse data to gain actionable insights that drive tangible results for their business.
These platforms also empower banks to tailor experiences to different customer segments. For instance, by analysing first-party data, banks can gain deep insights into their customers’ personal circumstances. This allows them to predict major life milestones that might prompt financial needs, such as buying a home, purchasing a new car or requiring additional lines of credit.
At the same time, the institution can use its data to better meet the needs of younger, digital-native customers – which is especially important with Gen Z and Gen Alpha burgeoning as a significant segment of the consumer market. And given how simple it is for consumers to switch banks, routinely providing top-notch offers and excellent service are imperatives that banks can’t ignore.
BECU, the fourth largest credit union in the United States, offers a great example of a financial institution getting it right. Using a CDP, it has experienced faster and more accurate data processing, automated and personalised marketing campaigns, enhanced member experience and satisfaction and increased business performance and growth.
By investing in the right technology, marketing teams, even those within the most heavily regulated sectors, can use first-party data to create more personalised experiences and offers. These initiatives, in a ripple effect, build loyalty and increase a customer’s lifetime value.
Creating a “single source of truth” with a CDP means building a central, unified repository of all customer-related data. It helps navigate privacy and compliance regulations while resolving the complexities associated with customers using multiple identifiers, such as various email addresses or phone numbers. By consolidating various identifiers into one comprehensive customer profile, a CDP enables more accurate targeting, personalized communication, improved customer service, and more effective marketing strategies.
However, the efficiency of this process heavily depends on the sophistication of the CDP, the quality of the data integration and the protocols used for data privacy and security. With the wide range of capabilities available across CDPs, banks should look for the features that align best with their specific business goals, the size and skill set of their team, their data privacy obligations and the other tools already in their tech stack.
Navigating the landscape of customer privacy in a digital world can be challenging, especially as new regulations and customer segments are introduced. By building robust repositories of first-party customer data, banks can feel confident about making informed decisions about their business without relying on external data sources.
About Author:
Matthew is the vice president of EMEA where he is responsible for the commercial expansion of Amperity, a leading customer data platform trusted by brands like Reckitt, Under Armour and Wyndham Hotels & Resorts. Lubeck joined Amperity in 2017 to help launch the company and has served in a number of key roles building sales, customer success, and marketing functions. Matthew established Amperity’s LGBTQ employee resource group (ERG) and is a trusted advisor and customer-centricity change agent to the C-suite across leading consumer brands.
Prior to Amperity, Lubeck spent 10 years with global beauty conglomerates Estee Lauder Group and L’Oréal as Group Head of Customer Data Strategy and Analytics, leading 30 brands across luxury, mass and salon professional divisions to better use data & unlock incredible beauty experiences, establishing L’Oreal as an industry leader. He resides in London with his husband and four-year-old daughter.
About Amperity:
Amperity delivers the data confidence brands need to unlock growth by truly knowing their customers. With Amperity, brands can build a first-party data foundation to fuel customer acquisition and retention, personalise experiences that build loyalty, and manage privacy compliance. Using patented AI and ML methods, Amperity stitches together all customer interactions to build a unified view that seamlessly connects to marketing and technology tools. More than 400 brands worldwide rely on Amperity to turn data into business value, including Alaska Airlines, DICK’S Sporting Goods, Endeavour Drinks, Planet Fitness, Seattle Sounders FC, Under Armour and Wyndham Hotels & Resorts. For more information, visitamperity.com or follow us onLinkedin,Twitter,Facebook andInstagram.
A Customer Data Platform (CDP) is a software system that consolidates customer data from various sources into a single database, enabling businesses to create unified customer profiles.
Digital banking refers to the use of digital technology to provide banking services online, allowing customers to perform transactions and manage accounts via mobile apps or websites.
Customer loyalty refers to a customer's commitment to continue buying from a specific brand or business, often influenced by positive experiences and satisfaction.
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