Few industry sectors are as competitive and as subject to technological disruption as financial services. From big banks to upstart fintech firms, the pressure is mounting for brands to better serve a customer base whose needs and expectations are radically different from the past.
New entrants to the financial services arena range from digital-only banks and fintech companies to giant telecoms, tech firms and others. At the same time, regulators are expected to add to incumbent firm headaches by adopting more open banking regulations that further enable new players.
In 2020 the fast-paced innovation will continue. To make the needed impact on the customer experience, banks should pay close attention to marketing-related data and analytics components.
Embracing innovation is essential. But according to this Forrester report on the future of banking, a mere 13% of financial services firms consider themselves to be tech innovators. As report author Jost Hoppermann rightly asserts: “Business and technology leaders in banks need to accelerate their efforts to catch up with leading competitors and digital challengers — instead of building tomorrow’s business on technologies from decades ago.”
Customers want their bank to anticipate their needs, personalize interactions and engage contextually—not just try to sell them something. The right data, used in the right way, can help.
Fortunately, most banks already possess a treasure trove of customer data. But bringing siloed data together to create a unified view of the customer remains a challenge. Banks have long been organized by product or channel meaning that data has been accumulated within application silos without a means for unification.
Developing deeper customer understanding through data
To develop a deeper, more holistic understanding of customers, banks will need to acquire, cleanse, integrate and analyze multiple sources of internal and external data—including online and offline.
A unified customer identity is essential to delivering the right offer at the right time. But integrating situational data from multiple sources and then linking it to operational data and offline demographic data in real-time is difficult.
Many financial institutions struggle to connect the dots to create organization-wide views of the customer relationship. As a result, marketing’s decisions are often made within business unit or product line silos, rather than on the holistic customer profile.
To be prepared for the future, financial institutions need to improve their analysis of customer behaviors, using salient online and offline data points to draw conclusions about how and why channels and specific tactics are performing at an audience, media and creative level.
With a complete data-driven view of customers, banks will be able to perform advanced analytics to uncover the things they should be doing to satisfy customer needs and enhance the overall relationship.
Three steps to creating a seamless and contextual customer experience
Although bankers recognize the need to deliver a seamless, contextual customer experience, only 17% of those surveyed feel very prepared to deliver such an experience, according to PwC’s recent Retail Banking 2020: Evolution or Revolution? report.
It’s vital to keep in mind that customers want a financial institution that recognizes their uniqueness and personalizes offerings. To get there, financial institutions should focus on these three things:
- Improving access to, and actionability of data. Having lots of data—including personally identifiable information (PII)—isn’t helpful if you don’t have sophisticated analytical technologies capable of uncovering insights for improving the customer experience in a highly competitive marketplace.
- Gaining a truly holistic and unified view of your customer. This must include analysis of data from both online and offline sources, and an ability to accurately measure the true incremental impact of your marketing efforts across all channels.
- Contextually relevant targeting. Accurate audience segmentation and targeting that is based on attributes you are certain will be contextually relevant, based on the holistic view of customers you’ve developed.
Rapid-fire changes in the financial services industry will continue to impact banks’ ability to attract and retain customers and grow revenue. To get ahead of the challenges and win in 2020, a focus on customer-centricity, big data, segmentation and unified marketing analytics is crucial.