Across multiple industries, companies that enrich and use data in a targeted manner are growing three times faster than their competitors, according to the McKinsey Analytics Quotient. Especially for banks, optimal data usage is the most important step to success. The future of banking begins with customers and data helps banks to understand their needs more precisely.
However, the strong focus on customers and the personalization of banking not only brings benefits for bank customers; it also opens up completely new opportunities for banks. Intelligent data analysis and enrichment are the answer to the major challenges facing banks: data enrichment allows them to provide targeted advice, significantly improve the digital banking experience and enable granular customer segmentation. As a result, banks can stand out from the crowd and boost new customer business, customer loyalty as well as cross and upselling.
Find out how these factors facilitate scalability and differentiation in banking and how you can implement them through intelligent data enrichment.
Effective Cross and Upselling Thanks to Data-Driven Sales Management
Exact customer profiles and high-quality data analysis give a scalable dimension to cross and upselling in banking. Transaction data enables banks to better understand their customers, provide suitable information about higher-value products and expand the customer relationship in a profitable manner. Bank employees can work more effectively and are able to do more with less. Data enrichment provides them with valuable information and indicates which customers have the greatest potential.
Thanks to accurate information about the customer’s needs and preferences based on near real-time transaction data, banks can automatically make suitable offers at the right time. For example, a bank can use the information from e-banking and credit card transactions (from third-party banks thanks to the multi-banking option) to make suggestions that have practical benefits for the customers and greatly increase the likelihood of closing a deal.
Does the bank customer have an expensive consumer loan? A bank can offer a more attractive loan. Does the customer attach importance to sustainability? Why not suggest a sustainable electricity provider. Just booked a flight to South East Asia? Now might be the right time to offer the customer travel cancellation insurance! Banks can even earn commission by cooperating with other providers, which increases their revenue per customer. After all, a relevant offer creates real added value for customers.
What is the situation in the Swiss retail banking market with its focus on customer data? Click here for a summary of the most important points from 14 expert interviews with Swiss retail and challenger banks.
True Differentiation Through a Personalised Customer Experience
An increasing number of people are demanding simple, intuitive products and services from financial institutions. Bank customers want personalized banking that fits in with the reality of their daily lives. They want seamless digital banking solutions that can be integrated into their lifestyle. In order to retain and inspire ever more demanding customers, banks must make sales channels and products more personalized. Banks gain visibility and relevance through the personalized user experience and thus stand out from the competition.
How do banks enable this individual, smooth customer experience? By adopting a data-driven approach, banks can ensure personalization and exceed expectations in terms of seamlessness and relevance. The more complete the customer view, the better they can design the customer experience and the more meaningful the advice. A personalized customer experience is enabled by a comprehensive 360-degree profile of customers based on near real-time transaction data, aggregated through multi-banking from a variety of sources. This enables banks to understand customers even better and provide tailor-made advice.
Data enrichment also optimizes the quality and relevance of automated financial products. A complete customer view is essential here as well. In this respect, digital banking services such as the Business Finance Manager offer banks high-quality contact points for even more meaningful customer profiles. Through innovative offers, e.g. in the form of an intuitive financial cockpit or liquidity planning, banks offer customers a financial management system that makes the products of competitors and/or third-party providers superfluous.
Disruption in Banking Enables Scalable Business Models
The banking sector is undergoing rapid transformation, and the playing field created by Open Banking requires new skills. This transition is taking place at an ever-increasing pace. Retail banks must rethink and develop their positioning and business models.
According to the Data-Driven Banking study conducted by the Business Engineering Institute St. Gallen, it is likely that established institutions will continue to dominate the Swiss banking world. But even that is not set in stone. It is possible that the established players will consolidate while challenger banks gain shares or the GAFAs take the banking sector by storm by intelligently using their own data.
In order to be successful in the era of Open Banking, banks need sustainable business models. However, growth is only sustainable if it leads not only to higher revenue, but also to higher profitability. Data enrichment can help banks to identify where the greatest profit potential lies. Banks can even use banking data to design completely new business models that are more informed and therefore more promising than those of their competitors through enriched data and predictive analytics. The prerequisite for this is that the data is consistently integrated into decision-making and work processes.
Integration with partners and ecosystems will also become more strategic when adopting a data-driven approach. Banks can enter into partnerships where they can make the most profit while simultaneously meeting customer requirements in the best possible way. As a data-centric organization, banks can set the tone in a banking ecosystem where revenue streams include not only traditional banking but also many other services for retail and business customers.
Easy Implementation with the Banking API
To ensure data-driven differentiation and scalability, banks are increasingly taking advantage of the opportunities that arise from collaborating with other companies. When it comes to data enrichment, the combination of a bank with large volumes of valuable customer data and a FinTech with the technological knowledge, excellent data skills and digital talent has proven its worth.
When it comes to data-driven scalability, banks do not need to invest in in-house development or implement complex processes. Via Open Banking interfaces to technologically experienced FinTechs, i.e. a banking API, banks can easily integrate innovative digital services and solutions for the analysis and enrichment of data into the existing infrastructure.
The marketplace of German FinTech ndgit shows how easily the banking ecosystem can function. Banks can use the mix & match approach to integrate analytics solutions quickly and easily into their existing ecosystems.