Banks are at a crossroads. Turning back is not an option, as their customers now consider them service-oriented organisations, compare their user experience with other sectors and have incredibly high expectations. However, going full speed ahead is regarded by many as unaffordable, too complex, divisive, or all of the above.
But what constitutes a successful bank? How can data-driven banking help pave the way to a successful long-term future for banks?
Discover how banks can seamlessly navigate the ever-changing, fast-paced financial world using customer-centric, data-driven banking services and ensure a sustainable win-win situation for both themselves and their customers.
Successful Banks Adopt the Customer’s Perspective
Data-driven banking is paramount if banks want to offer an above-average customer experience. More importantly, however, having an excellent customer experience is what will secure a bank’s success in the long run.
In the past, many institutions stuck to traditional banking processes — primarily focussing on the organisation’s own needs rather than those of customers. By contrast, digital transformation and the pandemic have been crying out for changes that focus on enhancing the customer experience.
Digitalisation closes the gap between a bank’s traditional offering and the dynamic needs of its customers. That is an important step. However, data-driven financial services enable banks to go one step further by offering an outstanding customer experience. Personalisation and true relevance are winning over today’s entitled bank customers.
Trigger-based marketing for demanding bank customers
Analytics-driven marketing enables banks to offer true personalisation, compete against new market players and ensure high performance. By contrast, trigger-based marketing allows banks to address customers in a very specific, direct manner based on behavioural analysis. Triggers propose certain reactions, which in turn can be used to suggest the next tailor-made offer for that specific customer.
Intelligent trigger-based marketing also works independently of the service channel. Analytics components aggregate and integrate customer data, provide insights, and display personalised offers across all channels. Predefined rules identify relevant products and services at just the right time.
Successful Banks Recognise that Knowledge is Power
Knowledge is power, that goes for the banking sector too. However, this is only the case if that knowledge is used in a meaningful way. Banks that use knowledge to benefit themselves and their customers have much to gain.
Knowledge about their customers helps banks to build better products, make tailor-made offers, and enter into strategic partnerships. Data analytics and data enrichment provides banks with the knowledge they need to act in their customers’ best interests.
Predictive banking for the future of banking
Let’s take the example of predictive banking. If banks can accurately predict what challenges and interests their customers will have in the future, they will be able to cater to their needs even more effectively.
Information about income and spending behaviour enables banks to target customers with personalised product recommendations that offer greater potential for customers and better completion rates for banks. This way, predictive banking is a clear win-win for both banks and customers.
High-quality transaction data contains many other exciting indicators. For example, banks can identify customers with the highest probability of closing a deal or derive metrics such as willingness to pay for new banking offers. Such knowledge even has the potential to radically transform financial institutions and the banking experience.
Optimal Use of Resources Puts Banks on the Path to Sustainable Success
So what’s the catch with data-driven banking? In short, the data. Most don’t have it, while others have too much of it. Banking institutions have the coveted prerequisite that many companies lack: high-quality data, even if it is still unstructured or comes in the form of big data.
Nevertheless, banks run the risk of accumulating too much unstructured data, which in turn leads to unnecessary costs and becomes increasingly difficult to manage. However, once they’ve put their data in order, they have the tools they need to ensure sustainable banking success. Through data enrichment and analytics, banks can create complete, highly usable data records (keyword: smart data!) to benefit both customers and themselves and to create a modern, digital banking experience.
A multichannel approach draws on a bank’s wealth of knowledge
The use of e-banking and digital channels is rising dramatically. However, for many bank customers, going into the branch is still the preferred option, or at least regarded as a meaningful point of contact. How can banks implement a profitable omnichannel strategy that includes all interaction channels?
Once again, the answer is data. As mentioned earlier, banks have a clear advantage due to the sheer wealth of data they possess. Increasing the number of touchpoints doubles this advantage. By analysing and enriching all existing data — from e-banking, the website, the mobile app, emails and data from offline offerings such as customer advisory services — banks generate even more knowledge that can be used in an optimised way.
The high-quality data derived from digital and physical touchpoints can also be used to consistently design and enhance the customer experience across all channels, as well as to offer in-demand products and streamline frontend and backend processes.