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UNDERSTANDING YOUR CUSTOMER: HOW FINANCIAL INSTITUTIONS CAN GET IT RIGHT

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UNDERSTANDING YOUR CUSTOMER: HOW FINANCIAL INSTITUTIONS CAN GET IT RIGHT

By Karen Kelly, Client Partner Lead for Financial Services at CACI

Karen Kelly

Karen Kelly

Over the last 30 years the financial sector has been inundated with changes and demands that have altered the way we bank significantly. Consumers’rapid adoption of mobile banking, the decreased use of local bank branches, and the volume of legal changes all contribute to the new financial landscape banks and building societies are managing today.

Almost all consumers need a bank account, and this means financial institutions will always be under pressure to provide services to a wide variety of people. It will come as no surprise to the banking sector that each customer handles their account differently, and this can be due to a range of factors from age to technology adoption. However,for financial institutions, understanding what consumers want as they grow up in the digital age, or grow much older, can be challenging.

By analysing customers and their behaviour, financial institutions such as Nationwide Building Society can not only provide a better level of customer service, they can also ensure that relevant products are being suggested at the most appropriate time. This can be as simple as understanding that when a customer applies for a mortgage, they may want home insurance – or as complex as suggesting that once they hit a point in their career they may want a credit card.

CACI, who specialise in consumer profiling, know that customer understanding is key for businesses who want to better serve their customer base. Having recently worked with Nationwide Building Society to help them develop their customer segmentation, CACI were able to assist Nationwide Building Society in ensuring their customers have a tailored experience offering products appropriate to their life stage and financial position, and much more.

Unlike banks, Nationwide Building Society is owned by its members, and as part of that, prides itself on the way it engages with its customers. The mutual status they have underpins a duty of care to serve members in the most appropriate way. To add to this, in an increasingly complex financial services environment, they understand that developing a common understanding of their members across online and offline channels is crucial.

In order to better understand their customers, Nationwide Building Society approached CACI for development of their segmentation tool bench. This meant a refreshed view of how they look at their customers, using tailored data analytics from both CACI and Nationwide Building Society combined.

Segmentation Project:

The core of the segmentation was based on customer life stage, whether this was going to university, buying their first house, or withdrawing a pension. CACI and Nationwide Building Society could then see how demands and needs changed alongside customer ‘life stage’. By choosing life stage, the analysis could be far more specific to customer needs at that moment for them specifically, as opposed to using general age which would be far more broad. Life stage also aligned closely with one of Nationwide Building Society’s key investment themes, and worked for them beyond a simple level of ‘customer understanding’.

In addition to this, CACI worked with Nationwide Building Society to identify key attitudinal dimensions. This was most relevant for analysing Nationwide Building Society’s relationship with members, and understanding whether their customers engaged with technology, were interested in personal finance matters, or were likely to turn to social media and chatbots for customer service.

CACI then took on the work of hosting workshops with key stakeholders, ensuring that senior members could contribute their expertise and experience of the brand as part of the profiling segmentation. They then put together a list of key dimensions which they wanted to measure within their customer base, before mapping out how this would look across their customers.This was then coded against a variety of other dimensions for example; affluence, behaviour across different channels, as well as attitudes. All of which were selected specifically to be useful for financial institutions and Nationwide Building Society specifically.

Using CACI data combined with attitudinal and lifestyle information Nationwide Building Society and CACI were able to provide a tailored customer view. This was in depth enough to include:propensity to engage with a brand on social media, frequency of internet use, smartphone ownership, average income,as well as a variety of other dimensions. This data ‘vocabulary’ could then be adapted to any area of the business, from student accounts to mortgages, making it a truly flexible asset for Nationwide Building Society.

Results:

Nationwide Building Society is now able to understand their individual members at a glance, and offer them the right products, services and advice to help them with their banking needs. By better understanding customers, financial institutions can provide a more streamlined and targeted level of service to all their customers.

This allows account providers such as Nationwide Building Society to better understand all of their members as individuals, rather than just assuming their needs based on age or location.

In a time when customer needs are changing so rapidly, and in a sector which is handling these changes across such an extensive customer base, offering tailored service may seem impossible. However, by investing time into understanding customer demands, and using data to streamline this by particular dimensions (such as life stage) financial institutions can create a model which works across their whole business; allowing them to see their customer quickly and accurately.

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Bitcoin, ether hit fresh highs

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Bitcoin, ether hit fresh highs 1

SINGAPORE (Reuters) – Bitcoin hit a fresh high in Asian trading on Saturday, extending a two-month rally that saw its market capitalisation cross $1 trillion a day earlier.

The world’s most popular cryptocurrency rose to an record $56,620, taking its weekly gain to 18%. It has surged more than 92% this year.

Bitcoin’s gains have been fuelled by evidence it is gaining acceptance among mainstream investors and companies, such as Tesla Inc, Mastercard Inc and BNY Mellon.

Ether, the second-largest cryptocurrency by market capitalization and daily volume, hit a record $2,040.62, for a weekly gain of about 12%.

Ether is the digital currency or token that facilitates transactions on the ethereum blockchain. In the crypto world, the terms ether and ethereum have become interchangeable.

Ether futures contracts launched on derivatives exchange CME earlier this month.

(Reporting by Vidya Ranganathan; Editing by William Mallard)

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World Bank pushing for standard vaccine contracts, more disclosure from makers

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World Bank pushing for standard vaccine contracts, more disclosure from makers 2

By Andrea Shalal

WASHINGTON (Reuters) – The World Bank is working to standardize COVID-19 vaccine contracts that countries are signing with drug makers, and is pushing manufacturers to be more open about where doses are headed, as it races to get more vaccines to poor countries, the bank’s president said on Friday.

World Bank President David Malpass told Reuters he expected the bank’s board to have approved $1.6 billion in vaccine funding for 12 countries, including the Philippines, Bangladesh, Tunisia and Ethiopia, by the end of March, with 30 more to follow shortly thereafter.

The bank is working with local governments to identify and fill gaps in distribution capacity, after they purchase vaccines under a $12 billion World Bank program, and also to standardize the contracts they are signing with manufacturers, he said.

The bank’s International Finance Corp, its private financing arm, has $4 billion to invest in expanding existing production plants or building new ones, including in developed countries, but needs more data on where current production is headed, he said.

“We are eager to be investing in new capacity, but it’s hard to do because you don’t know how much of the existing capacity is already committed to the various off-takers,” Malpass said in an interview with Reuters. New or expanded plants could be used to produce other types of vaccinations in the future, he said.

The bank’s funds could be used to expand plants in advanced economies, if the production was earmarked for developing nations, he said.

Malpass welcomed Friday’s pledge by the Group of Seven rich countries to intensify cooperation on the pandemic, saying it could help jump-start deliveries of vaccines to poorer countries, which are lagging far behind rich countries in getting shots in arms.

Data compiled by Our World In Data, a scientific online publication, showed Israel was leading the world in COVID-19 vaccinations, with nearly 82 of 100 people vaccinated, while India and Bangladesh reported less than one person per 100, Many African countries have not started at all.

Malpass said he was heartened by news about new vaccines coming down the road, and about Pfizer Inc and BioNTech SE seeking permission to store their vaccine at higher temperatures, which would ease another obstacle to deliveries in lower-income countries.

(Reporting by Andrea Shalal; Editing by Heather Timmons and Leslie Adler)

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Google to evaluate executive performance on diversity, inclusion

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Google to evaluate executive performance on diversity, inclusion 3

By Paresh Dave

(Reuters) – Alphabet Inc’s Google will evaluate the performance of its vice presidents and above on team diversity and inclusion starting this year, the company said on Friday in one of several responses to concerns about its treatment of a Black scientist.

Timnit Gebru, co-leader of Google’s ethical artificial intelligence research team, said in December that Google abruptly fired her after she criticized its diversity efforts and threatened to resign.

Alphabet and Google Chief Executive Sundar Pichai ordered a review of the situation. While Google declined to share specific findings, the company announced on Friday it will engage human resources specialists during sensitive employee departures.

Pichai in June said that by 2025, Google aims to have 30% more of its leaders come from underrepresented groups, with a focus on Black, Latinx and Native American leaders in the United States and female technical leaders globally. About 96% of Google’s U.S. leaders at the time were white or Asian, and 73% globally were men.

As a result of the investigation, the company also expanded a commitment announced in June to devote more resources to retaining and promoting existing employees, including by expanding a team addressing disputes among workers and their managers.

The diversity component of executive performance reviews was not previously announced, and the company did not immediately share details about what would be measured and how pay would be affected.

Alphabet for years had rejected proposals from shareholders and employees to set diversity goals and tie executive pay to them.

Irene Knapp, a former Google employee who advocated for one such proposal at a 2018 shareholder meeting, said on Friday, “I am pleased that they met our demand from 2018, which was a bare minimum that should have been easy to do immediately.”

Evaluating managers on diversity goals is becoming more commonplace. McDonald’s Corp on Thursday tied executive bonuses to diversity.

(Reporting by Paresh Dave; Editing by Cynthia Osterman)

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