Become the bank that knows what customers want

The average person has a stack of credit, debit and loyalty cards in their wallet and a relationship with various banks for loans, mortgages and mutual funds.

So how do you become the “go to” financial institution for your customers? This will require a thorough understanding of why customers make the decisions they do.

And analytics plays a key role in that, said Marc DeCastro, research director of consumer banking with IDC Financial Insights, during a recent webinar.

The current down-cycle in the financial services industry is “deeper and more painful” than anything in recent history, he said, but it’s also an opportunity to embrace a new financial services paradigm — and perhaps even profit from it.

This shift requires a different set of marching orders, and at its heart is analytics — which means using the data you already have available to predict consumer behaviours and, ultimately, provide a more fulfilling experience.

In the past, banks dictated consumer behaviour. If you wanted to interact with your bank online, for example, you had to use particular technologies, based on the bank’s legacy IT environment.

Nowadays, consumers do the dictating — though a lot of financial institutions haven’t caught up to this yet. Thanks to the consumerization of IT and the proliferation of mobile devices, IT departments are now building solutions based on consumer demands, rather than the needs of a particular business unit.

And that changes how financial institutions should be aligning their IT budgets and objectives, said DeCastro. This transformation is built on mobile broadband networks, driven by data analytics.

The problem is, many financial institutions still operate in silos. IT needs a more cohesive strategy, since there tends to be “channel overload” in this particular industry. “The only channel I’ve ever seen retired is fax banking,” said DeCastro.

All too often, financial institutions are not providing a consistent message to their customers across disparate channels. And today’s banking environment is particularly challenging, with non-traditional competitors entering the market such as Wal-Mart, Apple and Google that “banks must keep on radar,” said DeCastro.

In a recent survey, IDC found that of respondents who said they’ve downloaded financial apps, only 37 per cent actually use those apps.

“They need more reason to use them,” said DeCastro. “They expect more, particularly on the tablet.” That means taking into account how those apps will work on various form factors; a retirement forecasting app, for example, will look a lot different on a smartphone than on a PC.

Analytics can be used to create targeted marketing campaigns and personalized communications with customers. If a customer is researching a car, for example, they might need an auto loan.

But this must be delivered across all channels of interaction, from bricks-and-mortar branching locations to mobile apps — so the offer is available to the customer on whatever channel he or she happens to be using.

It’s about using analytics and automation to be at the right place at the right time. Many financial institutions, however, need to play a rapid game of catch-up, said DeCastro. “The tools are there,” he said. “Now it’s a matter of tying it into a cohesive campaign.”

Begin your analytics journey by downloading, ‘Getting a Handle on Big Data Doesn’t Have to Be a Big Headache,’ a white paper from Allstream. 

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