Execs Bank on Data for Customer Experience
April 21, 2022
Banking Enhancements and Data
As banks look to improve experiences for customers, there’s no question that data is front and center. In fact, it appears to be at the top of the priority list for many executives — according to The Deloitte Center for Financial Services Global Outlook Survey 2021, customer data analytics is the number one enhancement respondents plan to make to improve experiences for their retail and institutional customers. (The choice was selected most often by executives across a range of responses.) Customer service came in second, while the use of new alternative data came in third. Truthfully, all three of these areas involve data. Customer data analytics, if done well, feeds into customer service. And the use of alternative data, such as social media signals, for example, can enrich the overall picture of who customers are and what they want.
As we discussed recently, achieving a 360-degree view of your customers is key to driving more business from them in the future. That’s because the more insights you have into their behaviors, the better you can deliver on their wants and needs. Think about Amazon, for instance — it’s an e-commerce marketplace, yes, but it runs on data. Amazon knows when I am going to run out of trash bags, and it reminds me to order more before that happens. Is this unnerving? Perhaps. But it’s also convenient. And it works. I haven’t bought trash bags elsewhere in a long time. Banks can do this, too. They have heaps of data on their customers that can be used to deliver highly personalized offers and services. They just need to get all of that data in order. Unfortunately, that’s where the trouble is. This crucial step is hard. And it’s likely why not many of us are seeing Amazon-like experiences coming from our bank.
Hard, however, doesn’t mean impossible. Banks that are successful on this front will be those that create a well-defined data strategy underpinning all of their operations. That’s where this all starts. You’ve got to connect all of your systems and get them talking to each other. It’s going to be difficult. No one is saying it’s not. But it’s also necessary. It’s necessary because it’s the only way to develop a deep enough understanding of customer behavior to be predictive. And that’s where the value lies. The truth is we’re moving to a future where all companies will effectively run on data. Honestly, can you think of a single industry where having a good data strategy isn’t important? Now, think about your own data strategy. Does it make you feel prepared for the future? If not, then it’s time to start thinking about how data feeds your bank in a holistic way. From there, you’ll be able to achieve things you may never have imagined. And, once we embrace this notion as an industry, everybody wins. Remember, we’re all customers, too.