What the Banking Industry Knows About Data

bank of the future acl

The link between banks and race directors isn’t as tenuous as a first glance might suspect. Both industries are focused on providing experiences, rather than simply products or services. Both industries are inherently customer-focused, rising and falling with the tide of customer trends and whims.

What the banking industry knows is that good data is necessary to provide the best customer experience, anticipate customer needs and predict trends.

While the banking industry is still figuring out its data profile, this is what they’ve learned so far:

Offer an Exchange: Valuable Service for Valuable Data

This is how it works: Customers get to surf the ‘Net on their bank’s free Internet and, in return, banks gather valuable real-time data. According to Beyond Bandwidth, a communications blog by Level 3 Communications, banks are gathering a range of information about customers who log in to their in-branch Wi-Fi, some of which is used to create a better customer experience.

For example, by monitoring log-ins at a particular branch, a bank can see how many customers each branch is serving per hour and how long they’re waiting.

Other data points correlate directly to the bank’s bottom line. Like the ability to immediately assess the “value” of a customer based on how often they visit the branch and the status of current banking products, like whether a loan is due to expire.

“The bank can then send a representative out to speak to that customer right away, as the customer has been qualified as a high-value customer,” wrote James Opiyo, director of financial services at Level 3 Communications. “This seamless process is accomplished efficiently in real-time and in a very personal and pleasant manner.”

Banks can also do a fair amount of anticipation of customer needs by looking into customer browser history—someone looking for neighborhood-specific activities might be planning a move and ripe for a mortgage offer while someone searching for flights might be in the market for a travel reward credit card.

Recognize the Value of a Customer Profile

 

With a robust range of data-mining tools at its disposal, banks may know more about their customers than they do about themselves. What banks of the future are focused on is building a customer profile—a way to turn demographic data like age, gender and location into a look at what type of person you are, what you enjoy and how the bank can meet your financial needs.

Using the information you provide when you open an account or credit card, banks build that profile by looking at your purchasing history, online bill payments and Web browsing habits, along with third-party data, according to NerdWallet, an online provider of personal finance tools and news.

“They can start to build a much richer view of who you are and link that to you as an individual,” Khalid Khan, an analytics partner at A.T. Kearney, a management consulting firm, told NerdWallet.

Use Data to Enhance the Customer Experience

Ultimately, banks provide an experience that consumers either enjoy and continue to purchase, or consumers dislike and choose to deflect. Nearly half of all bank customers planned to open or close an account last year, showing a lot of movement and a lack of loyalty.

In response, big banks are trying to better understand the “customer journey”— how all of the ways that customers touch their banks with calls, visits to branches and Web banking affect purchasing.

Some enhancements are simple, like tracking mobile app usage to determine where to put new ATMs. Other mandates, like “monitoring for quality of service and identifying reasons for attrition,” are trickier, according to Tom Groenfeldt, a contributor to Forbes.com.