Financial institutions’ path to digital dominance lies in their data
In the past few years, we’ve seen exponential growth in the availability of information. The amount of meaningful data created and the computing power available to process and store that data has consistently increased. By 2020, about 1.7 megabytes of new information for every human being on the planet will be created per second. Yet, some researchers suggest that less than 0.5% of all data is ever analyzed and used. In today’s competitive environment, financial services institutions must be hyper-focused on retaining their existing customers, and continually growing their customer base. This requires reliable insight into customer trends as well as historical data.
Financial institutions sit on a treasure trove of data from a growing number of sources, which may not be well organized, coming from third-party sources and social media. When data is fragmented across multiple legacy, product-focused, and siloed systems, it can be increasingly difficult to apply intelligence, forecasting, predictive analytics, or machine learning to glean actionable insights. To gain a competitive edge in today’s dynamic, digital global marketplace, financial institutions must evolve into data-centric organizations.
Use data to extend value across the customer journey
There is enormous opportunity for financial institutions to use their existing data more effectively and create value for their customers and their business. By focusing on improving the customer journey, financial institutions can deepen customer relationships and develop trust. Data can help to build that trust in many ways — for instance, helping customers make smarter purchasing and payment decisions, or providing education around fraud protection.
Financial institutions can leverage technology-driven innovation and use data to support financial inclusion, develop cheaper and better services, and increase efficiency. Approaching data-fueled innovation as a tool for enabling better customer engagement–not simply as a defensive strategy against traditional and non-bank competitors — can allow financial institutions to reap the rewards of customer insights that translate into higher revenues.
Here are five ways financial institutions can leverage data they already have to provide increased value throughout the customer journey:
Financial institutions can leverage content, data, and analytics to deliver personalized, relevant, and real-time product recommendations to their customers. Personalization of financial services must inform the customer’s journey through real-time delivery of targeted content across any platform, at any time. This type of hyper-personalization is part of the “high-octane” financial institutions need to differentiate their digital strategy with tailored offerings that integrate solutions their customers’ lives.
Contact centers are pivotal points in the customer journey. Financial institutions must develop strategies based on the actionable insights from their client’s data. They can then empower contact center agents to cultivate customer loyalty by providing an integrated, single view of the customer. Technology-driven innovation such as AI-powered sentiment analysis is a powerful tool for enabling this type of personalized customer engagement.
Financial institutions can use process automation to assist in middle and back office operations, including risk model development. Using an integrated platform to connect data sources, financial institutions can measure the chances of unfavorable and unforeseen events affecting the bank. They can be better prepared with potential remedies if such a situation arises. These risk models can be used to reduce credit risk, market risk and operational risk.
Predicting and preventing fraud:
When financial institutions can predict and prevent fraud rather than acting after the fact, they can achieve huge savings. Using the data they already have access to, financial institutions can understand activity patterns among their own customers and the broader industry, especially around emerging attack vectors and threats. Financial institutions should be data-driven, not outcome-driven. Rather than focus on a desired outcome such as reducing card fraud, financial institutions should look at the big picture that the data reveals.
Financial institutions can use their data to understand where they’re succeeding, and why they aren’t performing as well. With a unified platform that allows access to real-time and historical data across various systems, there is increased flexibility to measure and report on programs and products.
If you're interested in learning more about your data's potential, Appian and IPD Solutions can guide you through the process. Read about our products, services and solutions, or request an individual consultation call today for free.
Photo by Franki Chamaki