Financial Institutions – Your Customers Are Ready for You to Get up Close and Personal

Financial institutions hold a huge amount of data on their customers. This ranges from demographic information such as age, gender and location, but also more interesting life style information such as which phone provider they are with, whether they go to McDonalds or Burger King most frequently and how much they really spend on shoes each month (regardless of what they tell their partner). In fact, if they pull all of this information together, they’d probably know more about their customers than any other organization. But what are they really doing with this data?

Outside of the financial sector we see companies doing pretty cool things with big data of this type, using it to personalise and tailor their service or offering to their customer, develop new products off the back of identified opportunities, and build a stronger relationship with their customers. Thus far, there have only been a handful of examples coming out from the financial sector.

Take American Express for example. They have recently collaborated with TripAdvisor to provide card members with trends in dining, travel and entertainment of like-minded individuals. This means that they can see where most business travellers stay and eat when they are in London, or where “foodies” eat in when they are in Paris. Simply by knowing their customers, they can provide them with a useful tool to make their customer’s lives easier when abroad. Another example comes from the ANZ banking group who are using the breadth of data they have on their customers, their own services, and market trend data to provide their customers with faster, smarter and more personalized banking recommendations. This is currently having an impact on two million of their wealth management clients.

So why is the broader financial sector not leading the way with this type of service, when they hold so much data on their customers?

We of course have to acknowledge barriers which do make this harder, such as historic regulations, out dated systems, alongside a traditionally inward focus way of working, but these are no longer acceptable excuses and it’s time for the sector to make some noise. What is more, customers are now, more than ever, accepting of their data being used, if, and only if, this has a positive impact for them.

So where do I see the opportunities for the sector are when it comes to effectively using big data?

  1. It can be used to deliver more relevant, meaningful and personal communications to your customers, by going beyond traditional metrics used such as age and gender to inform delivery.
  2. It can be used to provide a more holistic view of your customers to better serve their needs, by bringing together data on what financial products they have (in one system), alongside lifestyle information.
  3. It can be used to produce a tailored money management tool, specific to each customer and their behavior.

There is a huge opportunity for the sector to use, and get real value from big data if correctly implemented. In doing so, there is the potential to build loyalty in a previously un-loyal sector. The advantage of doing this is obvious, a secure customer base, which increases in value over time, is more profitable than a continuous focus on new business acquisition.

More Business articles from Business 2 Community:

Loading...
See all articles from Business 2 Community

Friend's Activity