The importance of becoming a data-driven organization is not a new concept. A vast majority of banks and credit unions understand the foundational need to let data drive decision-making, yet a successful data-driven mindset still eludes many of them.
Financial institutions face challenges on their journey to becoming data-driven, but the key element to success is actually quite simple – leaders who are willing to evolve alongside our everchanging banking and technology landscape. Those who do not are bound to encounter hiccups while trying to meet all their banking consumers’ unique needs.
What interferes with FIs leveraging data?
Banking institutions can run into numerous dilemmas while trying to leverage their customers data, including the constant evolution of consumer data tracking, a massive growth in data volumes, and new concerns over privacy. The leaps and bounds of technological advancements in the last decade can cause the target to constantly move, although the end goal is always the same.
The biggest barrier to overcome has nothing to do with data or the technology that tracks it, but rather, it is leadership and corporate culture. A main juxtaposition between FIs achieving success versus those lagging is their ability to lead and adapt.
Adapting communication, services and platforms were a necessity in the early days of the COVID-19 pandemic, but many organizations did just enough to survive without purposefully utilizing the power of their data or digital presence. As pandemic protocols eased, consumer preferences for a digital experience did not. The reality today is that there’s a new normal for digital banking, and it is up to banks and credit unions to accommodate their consumers where they are in their financial journey.
A small minority of banking leaders believe that digital outreach of any kind is too intrusive for their customers/members. Speaking as a consumer myself, and as a supplier of engagement technology to organizations that work with significant numbers of consumers, this could not be further from today’s reality. It is our experience that only a minuscule number of consumers actually opt out of receiving messages and offers, especially ones that are meaningful to them. “Meaningful” frequently means communications driven by data insights.
Becoming data-driven is about financial institutions and their C-suite leadership being more than just willing to accept the digital direction the financial services landscape is following but actually embracing it. FIs that have reaped success for generations are facing rapid shifts in technology and consumer preferences, so to keep being successful, they need to finally implement digital capabilities that they have procrastinated about for years.
As Harvard Business Review points out, “While companies may have paid lip service to the importance of data before, the case that good data is essential to making informed, prudent and judicious business decisions has been made crystal clear over the past two years.”
Becoming data-driven means a shift in an underlying mindset – data is good. Efficiently using the data that banks and credit unions already possess provides deep insights that allow them to understand what a customer/member wants and needs. Institutions can use data to ensure they are delivering the most relevant offers and messages possible to their members or banking consumers. To this end, leadership needs to prioritize actionable digital strategies to assert themselves as a contender amongst competition.
Today, technologies exist that can streamline and simplify the execution of digital strategies. Depending on the scale, FIs don’t necessarily need to be thinking about large investments in data officers or digital analysts to get started. An alternative way to leverage their data in a way that offers strategic insights could be via an automation solution that can capture and utilize key data insights in a way that benefits individual consumers.
By adopting a data-driven and innovative approach, banks and credit unions can pursue growth and longevity in a dynamic banking environment and deepen consumer relationships at every step of their journey. Leading this change requires banking leadership to embrace the huge value of executing data-driven strategies to thrive today.
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