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Technology / Data

How a Data-Driven Customer Experience Could Keep Banks Competitive in the Digital Age

Today, more than ever, people want what they want, when they want it. Consumers expect access to all of their services with ease and convenience, and digitally enabled lifestyles are driving heightened expectations for service providers to not only meet customer needs, but to anticipate them.

John Smith, Managing Director, EMEA, Fiserv

Everyday banking and financial management is no exception. If an online shopping site can remind a shopper to buy diapers when they purchase baby formula, why can’t a bank remind them when their bill is due?

As consumers change the way in which they bank and new competitors enter the market, banks can rise to the challenge by utilizing data to understand customer needs and anticipate what they want. These insights can enable financial institutions to tailor products to specific customer segments or even individuals. Data can drive innovative new ideas, informing strategic initiatives as financial institutions work to deliver new and modern ways of banking to their customers.

 

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The Power of Data

Money is a very personal topic, and customers expect their banks to know them and deliver an experience based on that knowledge. The thoughtful analysis and use of data makes that possible.

Financial institutions are well positioned to deliver a superior experience to customers. Most people have a long history with their bank, so the bank has data from many interactions. By analysing the data they already have, banks can learn exactly what customers want and apply that knowledge when developing services. The result is a tailored set of services and experiences at the individual customer level.

With the implementation of PSD2 early next year across Europe, new regulations are coming into force on data sharing. It is an ideal time for banks to look beyond what is required and evaluate what they can learn from customer data, and then mirror those learnings in their product development and service delivery.  A bank can evaluate how to differentiate its offer, adding value to the customer by delivering the right service to the right customer at the right time to enhance their overall experience.

By gaining an enhanced understanding of its customer base, a bank can better adapt and prepare for potential changes in the industry. If a bank fails to be progressive in its approach it risks taking a backseat to emerging brands and becoming only a conduit for capabilities, resulting in a huge shift in power in the financial world.

By making the most of valuable customer insights, banks are ultimately gaining a better understanding of the wants and needs of customers when it comes to the banking experience. Banks can then develop and launch the innovative financial services that consumers are demanding, such as real-time payments and biometric-based banking. Innovations like these help banks to deliver tailored, value-added services and provide customers with new banking experiences that fit in with the pace of everyday life.

 

The Security Factor

The importance of maintaining the security of customer data cannot be overstated. The ability to manage permissions and allow customers to opt out of any use of data with which they are not comfortable are important considerations to any data-driven strategy. Services and offers can be tailored to segments of customers or specific customers using basic information such as account balances or propensity toward certain transaction types, and in many cases customers are often willing to share information about their own preferences. Gaining a better understanding of customers requires the highest level of respect and security of information, including compliance with all pertinent regulations on the sharing and storage of data.

As consumers interact in more ways and banks deliver banking services across more connected devices than ever before, a layered multi-channel, multi-device approach to security will help ensure the security of customer information. Newer capabilities such as biometrics can facilitate enhanced security without a customer experience trade off, as biometric authentication methods such as fingerprint, voice of facial recognition can be integrated seamlessly into financial interactions.

 

Future Route of Financial Services

As financial services has transitioned away from traditional branch banking, interactions and the relationships built on them have moved to digital channels. People want to experience financial services in a way that fits around them and their lives, and expect their services to integrate seamlessly into their own world. This provides banks with a clear opportunity to demonstrate that they understand the needs of customers, and can offer services to suit them.

Through the smart analysis of data to better understand the customers and their needs, and the intelligent application of that data, banks can provide customers with an experience for which they will continue to come back.

 
This article is from the CBROnline archive: some formatting and images may not be present.