Banking / Finance

Differentiation in Banking requires better data insights

24th Mar `15, 05:05 PM in Banking / Finance

Financial institutions have access to billions of existing data points on consumers that can help them better understand current…

BDMS
Guest Contributor
 

Financial institutions have access to billions of existing data points on consumers that can help them better understand current and prospective customers’ needs. As a result, these same organizations are well positioned to use this data to improve targeting programs, the consumer experience, and ultimately, loyalty and revenues.

Analyzing transactional data is at the core of the data at a financial institution’s disposal. Transaction data can uncover powerful insights into customer needs, preferences and behaviors. However, transaction data represents only one type of insight that financial institutions possess. Other types of insight that reside within an organization include both structured data (demographic profiles, product ownership, balances, etc.) and unstructured internal data (call center logs, channel interactions, correspondence, etc.).

In addition to internal data sources, banks and credit unions can also take advantage of external data. Social media represents a largely untapped source of insight that financial organizations can use to develop a more holistic view of their customers. Social media insight is most effective in identifying opportunities based on recent life events, such as a birthday, marriage or even a recent major purchase.

At the end of the day, capturing and using consumer insight can be an important differentiator for organizations hoping to build new relationships and solidify those relationships already in place. In fact, CapGemini found that over 60% of financial services institutions in North America considered data analytics to be a source of a significant competitive advantage. In addition, over 90% believed that “successful data initiatives will determine the winners of the future.”

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