Banks and Technology

Thursday 24th, December 2015

customer service photoTechnology has gone a long way in changing the way everyone does anything. Banking is no exception to this.

Banks have a tremendous amount of data about their customers. They just need to use all that information. Analytics are being used – but not optimally in all areas. That could well be the way to anticipate the needs of the customer and to catch any churn before it happens. Technology can revolutionize the way the bank interacts with the customer – simply based on all the customer-data that they have and can act on.

Customers have several touchpoints when it comes to their interactions with a Bank. It could be a branch, it could be an ATM, it could be the Bank’s web page or it could be through the customer’s mobile phone. But what the customer wants, across all these channels is uniformity and the same messaging. So a 360 degree view of the customer, along with information about all his interactions with the bank through the many channels must be available at all touchpoints – so regardless of which channel he shifts to, he can just pick up where he leaves off. This gives the Bank to target the right offers to him at the right time. The Bank will also know when to up-sell or cross-sell any additional products.

When all the customer data is brought to a central spot and this is made accessible to the different channels of the bank, it takes customer relationship management to a different level. When predictive analytics is applied to this, raw data becomes actionable information. Then predictive, targeted and relevant offers can be made to the customer at the right time. This will prevent churn and the happy customer is retained.

Big data and analytics help Banks provide a more targeted and individual level of service to their customers. For example, when HDFC Bank invested in getting a holistic view of its customers through technology, it showed immediately in the improved service quality – which reflected in increases in both acquisition and retention rates. In another instance, American Express integrated its loyalty scheme with social media to engage its customers. This saw a significant increase in their customer base.

Predictive analytics tools can facilitate the banks’ understanding of the behaviour of their customers and help them meet all their unique needs with tailored products and services, improving customer retention as a result. If a bank knew that their customer might move to the competition, they could focus all their efforts on retaining that customer. With the market being saturated, most banks realise that chances for any organic growth in banking are not that great. Therefore customer-retention efforts are more important than ever. And predictive analytics could well be the answer. You can understand customers and can understand the market and the industry as well. This will help shape the marketing strategies that will be unique to each location.

Technology should be used by Banks as an enabler – to collate data and derive the right metrics to understand customer issues and use all this to improve service which will work in enhancing customer loyalty. Then what you have is a happy customer, a brand ambassador of the Bank who will contribute immensely to enhancing brand value and increasing sales and corresponding profitability.

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