The banking and financial services industry today faces immense competition. These financial institutions need to strive hard to become efficient every day. They have the onus to use the data that they own for promoting new growth and revenue. These institutions need to think beyond their banking compliance strategies and efficiency ratio to improve customer satisfaction and banking experience with enhanced data analysis. (Image source: House of Bots)
Data analysis improves the customer experience in the banking industry
Banks and financial services have the mission to improve levels of customer experience and satisfaction. This can be attained by understanding the existing customer base correctly. These financial institutions should relate to their customers even if it means taking a 360- degree view of their customers and leveraging the data they hold. Banks and financial services generally hold data that pertains to-
- Customer information like location and contact data
- Data from the customer life-cycle that includes extra experiential information about the customer attained from all the phases of the customer life cycle
- Information about customer transactions that include savings, checking, credit card, loan withdrawals and repayments, account balance and investment status
- Data relating to customer service
- Social media data
Now, the question is, how does data analysis improve customer experience in the banking industry? Experts in the field say that when banks and other financial institutions collect data relating to the customer experience, they are able to draw meaningful insights into whether their customers are satisfied with the banking services or not. Once they get these insights, they are able to strive for better revenue and profits from their customers.
The onus of putting this data into action
Banks and financial institutions of every size have volumes of data; however, this data is not collected or leveraged correctly. The harnessing and the leveraging of this data for effective bank operations have always been challenging. If you take a look at the current market scenario, banks, and financial services, institutions should understand their customers, products, pricing, and channels to reach out to the targeted customer base. Banks of all sizes should customize their product offerings to the different stages of the customer life-cycle in order to optimize their revenue to the maximum levels.
The life stages of the customer and its significance
With the aid of information relating to customer transaction and core customer data, banks need to determine the family dynamics as well as the life stages that permit improved product bundling towards their targeted customers. Banks, should, if possible, target their messages and products to customers at different life stages both in the present and future.
What are the important life stages of the customer should banks and financial institutions consider?
With the help of reviewed transactional and core customer data, banks should consider the following stages of the customer life cycle-
- Entrance into college
- Graduation and workforce entry
- First child
- The entrance of children into college
- Retirement planning and final retirement
Experts in the field of banking and finance state that the above life stages of the customer have different pricing and product requirements. Banks and financial services should conduct a detailed data analysis on the information of transactions done by the customer along with their social media data to anticipate the unique need of the customer before they make an entrance into the next stage.
Banks, while collecting this data, should educate and make their customers aware of the following stage and what they should expect financially. This is a value-added service that will make them different in the competition and improve the levels of customer loyalty.
How should banks conduct this data analysis?
Banks and financial services companies face the mammoth task of collecting the above data from their customers and placing them in a single platform. Experts in the field state that in the absence of the correct data analysis tools and methods, sourcing this data and making them accessible is a tremendous challenge.
If the system or the structure is disparate, it becomes very hard for banks to consolidate and align this customer information. Therefore, it is the need of the hour for banks to place a priority on the merger of these data systems for the above purpose. The major focus should be on assessing the quality of data and maintaining its consistency.
The investment is worth it
Banks and companies that deal with financial services will find the above task to be a monumental one to do alone. However, it does make sense to consult a specialist in the field of banking operations to map, consolidate, and analyze banking data that is collected in the organization.
Once this core data has been accumulated and consolidated, data analysis tools like predictive analytics can be used for getting more customer insights for product alignment and targeted marketing at the individual customer level. If you are able to do the above, you will be glad as it is worth the effort and gives you productive results. This data analysis will also help you gain a competitive edge in the market as well.
Keep in mind key factors
Note that for effective banking operations, one should watch their efficiency ratio and compliance strategy. This is crucial for the effective functioning of banking operations. At the same time, the onus should be on improving the levels of customer service and satisfaction. With the power of data analysis, this task becomes simple, and you are able to offer customers a positive experience of a lifetime.
Therefore, Last but not least, no matter how big or small your bank is, you have to be aware of the market competition in order to stay afloat. With data analysis done in the correct way, you are able to gain a competitive edge in the market and improve levels of customer service and satisfaction to a great extent. Though data analysis does seem to be time-consuming, it is worth the effort and goes the extra mile for your bank and financial services company with success!