Leveraging customer data through the core
One of the central problems banks face is that, despite the wealth of information available to them, there is still much they do not know about their customers. For example, a customer might have a checking account and a car loan with your bank. This means you have a wealth of information on the customer’s daily spending habits, the frequency and size of deposits and the status of the car loan. If the customer uses bill pay services, you have even more insight into their bill paying habits: to whom, how much and how often.
But even in this basic scenario, there still is much the bank doesn’t know. Does the customer have a retirement plan? With whom? How is it funded? Are they homeowners, and if so, who holds their mortgage? What are their financial goals: to get out of debt, save for their children’s college or put the final pieces into their retirement plan?
Understanding the importance of that data is one thing; the next step is determining how to get the data and ways to leverage it.
Acquiring Data Currency
Gathering the data banks need to be more profitable can be difficult. Consumers are increasingly savvy about their personal information, and there are legitimate fears about data breaches compromising their privacy or sensitive information. However, one of the simplest ways to gather the necessary information is simply to ask. This can be done at account creation, during regular transactions, and even during a time of dedicated account maintenance.
But it’s still likely that there will be gaps in the information needed. In this situation, having a comprehensive database or customer relationship management (CRM) option is very useful. This provides a greater view of the customer, which can be visible by all staff within the bank via the same system used to complete the majority of daily tasks.
By building CRM directly into the core, banks can solve two issues. First, it vastly improves the customer experience by removing blind spots and providing any bank employee real-time access to information to help them speak intelligently about any of the customer’s accounts. Second, integrating a CRM also improves adoption among bank employees because it eliminates the need to open multiple programs and duplicate efforts.
Along with integration capabilities, next-generation CRM solutions often are accessed through a cloud-based platform, allowing any employee to use it immediately, regardless of location. With this approach, loan officers can meet with a prospect at their place of business, or a branch manager can follow up with a customer while traveling. Work productivity and efficiency is improved, as is employee satisfaction, because they have the tools to ensure their success. Universal access to the CRM also enables bank employees to identify valuable offers and solutions and present them at the right moment, via the right channel, thereby maximizing customer satisfaction while yielding the greatest possible return.
Once a bank has the data needed to make intelligent decisions, the challenge becomes using that data to positively affect profitability. There are two primary areas in which an institution can use data to build a stronger bank. First, by leveraging this data, financial institutions can build a stronger customer experience. Today’s consumers expect their bank to employ a customer-centric service model over a traditional, transaction-oriented one. This means that customers see one bank; they don’t care whether the core system, internet banking, loan servicing systems and mobile banking platform are separate. They just want their bank to be able to complete their transaction or help them achieve some financial goal, no matter which touchpoint they use.
Banks can analyze their customer data to determine where their customers are accessing the bank, and where they are likely to do so in the future. This doesn’t mean that every bank should take the same strategy. For example, while most customers will use digital channels for everyday transactions, the branch is still essential to meet certain client needs and expectations. So a bank in a college town may need more mobile options, while a bank focusing on complex business loans may need a more robust branch presence to handle complex requests.
As much as customer experience can be enhanced by data analytics, these tools can be leveraged to identify those new services needed to expand your customer base and increase share-of-wallet. It’s no secret that innovation is changing the face of banking, and consumers are increasingly expecting banks to offer the latest services and tools. In a 2015 survey of more than 2,000 consumers conducted by CSI and global market research firm Harris Poll, 50% of the respondents said that technology was a key factor in selecting where they bank. This percentage jumped to 65% for males under the age of 35.
But just as every bank will not have the same customer experience framework, every bank will not need the same mix of new tech tools. Some will need to focus on more mobile banking options like mobile check capture or peer-to-peer payment networks. Others will need higher technology around card programs, such as supporting EMV or card-control tools.