I want to take a brief moment to introduce myself. I’m Frank Bria, Principal & Owner of Bria Strategy Group. Until recently I was the Sr. Director of Banking Solutions with Earnix. My role was to meet with banking customers and prospects to discuss their challenges in making profitable customer-centric decisions, like marketing and pricing, and show how Earnix can help address those issues. My role gave me the unique opportunity to meet with banks all over the world and hear how they are tackling the challenge of leveraging data and analytics to improve the bottom-line.
As part of that role, I had the great opportunity to sit down with some great thought leaders in Europe to talk about how banks use predictive analytics to create a better customer experience. We broadcast that live discussion from the London Stock Exchange. I’ll let you watch the broadcast yourself, but I can call out three major points that were brought out in the discussion.
- Our Customers Expect Us to Know Them
One major theme that emerged from the discussion was the ever increasing expectations of our customers. In the world of Google and Amazon, customers are used to having things personalized. Whether search results and offers are tailored by Google based on our previous browsing experiences, or new book and movie selections are sent to us by Amazon based on our previous buying habits, the expectation of using personal data to customize the experience is firmly set.
Banking has a difficult time meeting this expectation. In a recent survey of younger consumers, 53% of respondents felt that all banks offer the same products and services. And in the UK, regulators see that “sameness” as a threat to competition. These should be wake up calls to the industry that consumers – and regulators – are demanding more.
- We Have a Lot of Work to Do to Improve the Banking Experience
Given the lack of diversity in financial products, most banks attempt to use service as a differentiation. One recent data point offered by a major technology platform provider showed the stark difference in perception. Although 80% of CEOs believe they offer superior customer service, only 8% of their customers agree with that sentiment. If service is the differentiation in brand, then the banking industry as a whole is failing to deliver on that promise.
But there are other things we can do to improve that service proposition. By leveraging the customer’s own data, banks can individually tailor the services they offer in a way that adds value, helps consumers make financial decisions, and builds loyalty. Even in this world of data privacy, customers indicate that they understand the trade-off between data and better service. A recent survey of banking customers shows that 69% of US consumers would be willing to provide more personal data if it meant personalized service, better identity protection, and simplicity in managing their finances . So it’s clear that banking customers are showing the way to a successful and loyalty relationship.
- The Biggest Roadblock to Analytics Implementation is Management Support
But the promise of analytics has been around for decades. Being able to deliver the right product to the right consumer at the right time and the right price has been a “holy grail” of sorts – not just for bankers, but for many industries. And although many verticals just as retail, telecommunications, and the travel sector have made good progress in these areas, banking still falls behind.
Why? We asked this question during our webinar to our hundreds of live participants. The number one reason they cited was “management support.” And this is in line with what we see from many banks that we talk to. Although the promise of analytics is much discussed, it’s difficult for banks to craft a value proposition that leverages those analytics without understanding the end state.
Along those lines, recently the chief technology officer of a major banking analytics vendor said the same thing. He cited company culture as the number one barrier to analytic adoption within banks. Culture, is of course, a function of the company’s management. So they must be asking some questions about the effectiveness of customer analytics.
One author offered four potential questions management may be asking. Knowing those questions – either expressed or left unspoken – will help drive adoption within the bank.
- Can we afford this?
- Do we have the data to build this?
- Do we have the skill set to support this?
- Do we even need this (yet)?
I’d love to address those questions in a future post, but for now, we should know that they’re being asked.
I hope this is a good lead-in to our webinar. We’ve provided the link so you can watch the broadcast. It was a valuable discussion that included some great case studies from banks all over the world. I look forward to continuing the discussion with you periodically through these posts. In the meantime, if you have questions or want to continue a discussion on these points, please feel free to reach out to us. We’d love to hear your thoughts.