Banks have long been seen as distant looming figures to their customers. This has always created a degree of separation that has slowed growth in the past. As is the case with any retail business, understanding and connecting with customers is the only way to build a solid and sustainable foundation in banking. Long ago, this was easier said than done. Thanks to customer analytics, both large and small banks can gain valuable insights into their customers, allowing them to evaluate new opportunities for up-selling and cross-selling. Customer analytics is key to driving growth in banking.
Studies suggest that financial marketers lose out when they fail to extract value from internal and external data sources. The reason? Data collected from customer analytics software guides product development increases customer communication, drives innovation, and spurs growth. In fact, research shows that those banks that used advanced analytics programs actually enjoyed more growth than peer banks that did not utilize analytics. Let’s examine how customer analytics is truly driving growth in banking today.
Improved Customer-Centricity
Customer analytics is a key part of financial software development solutions because it is paramount to customer-centricity. Banks have ignored fostering a customer-centric model for too long. However, with customer delivery and communication channels growing, more customers want to interact with their banks using online or mobile platforms. In this way, it is essential for every bank to hire a financial software developer to facilitate this communication. These channels allow for real-time sales, always-on service, and a degree of customer satisfaction that can’t be met otherwise in the current day. Using analytics and mitigating to digital channels has been proven to help with:
- Improving overall branch efficiency
- Integrating sales and tools in a digital platform
- Driving high-value high impact traffic back to branches
At a time when customer-centricity is more important than ever, data analytics can help to bridge the gap between bank and customer.
Greater Customer Insights
If a banking institution does not know their customers, how can they best tailor services and products to meet their needs? Thanks to customer analytics, banks can finally gain greater insights into who their customers are. Demographics such as behavioral and attitudinal insights can all be collected, which can be valuable in making differentiated products that serve a certain population. Additionally, predictive analytic models such as the FICO score can be used to analyze a customer’s credit history, credit applications, and loan applications. This data can predict how likely it is that a consumer will make payments on time.
Enhanced Risk Management
There isn’t a single financial institution on earth that wants to take an unknown risk. Luckily, customer analytics and data help with enhanced risk management practices. With data mining practices, banks can track internal purchase and balance insights with transaction patterns and social media interactions. Each can provide insights into potential losses or fraud. This type of structured and unstructured data can also be used in traditional risk management practices, such as making big decisions regarding pricing or new platform rollouts.
Finely Tuned Marketing
Finally, customer analytics can be used to finely tune marketing campaigns. The right data can increase the effectiveness and efficiency of sales and marketing for any bank. With data, agencies can derive the likelihood that a purchase will occur based on demographics and customer-centricity. Rather than offering products based solely on what the financial institution would like to sell, banks can now make unique and relevant decisions or offer based on real customer insights.
