How Financial Institutions Can Better Leverage Their Data for Digital Banking

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Banks and credit unions can use the wealth of data at their disposal to optimize the in-person or digital banking customer experience.  

Banks and credit unions can use the wealth of data at their disposal to get to know their customers, and thereby better serve them. While removing friction the customer journey is the top retail banking trend of the year, according to a survey by The Financial Brand, the second biggest is the improved use of data and advanced analytics.

Financial institutions (FIs) should harness their customer data – both transactional and at the account level – to understand and predict customer behavior. For example, if a customer may like to pay bills on Saturday morning, his or her financial institution can anticipate that need and facilitate the digital banking feature quicker, saving time and optimizing the customer experience.

Machine Learning

Although artificial intelligence (AI) can be a hard concept to grasp, it can be used not only to enhance the customer experience, but also to increase automation, improve personalization, reduce costs and assist with compliance, reports The Financial Brand. The payoff of such advanced analytics is exponential rather than linear, as each data point and measurement result builds learning that, in turn, enhances predictive model output.

Banks and credit unions can utilize comparative data analysis to pinpoint changing behavior and then determine the cause. Account-level data can also be compared against the general population to potentially uncover marketing and cross-selling opportunities. For example, a consumer doesn’t have a savings account, but his/her account information matches the general population profile of those using such accounts. A bank or credit union can use this information to provide relevant offers to this consumer.

Financial institutions can apply machine learning and data analytics to improve customer onboarding campaigns, boost customer loyalty and engagement and to reduce fraud. 

With so many financial services choices and elevated customer experience expectations based on nonfinancial companies, customer onboarding has become even more critical for banks and credit unions. With better leverage of data, these institutions can lower attrition rates and transform the disjointed process of onboarding campaigns.

Bank and credit union customers value convenience the most. When financial institutions provide dynamic products that are geared to their needs, increased customer loyalty will follow.

Finally, customers also want to feel secure and in control of their important financial data. With advanced data analytics, banks and credit unions can recognize suspicious behavior patterns and through re-segmentation, flag a bad actor and transfer that account to a restricted, read-only status. 

People remember good service. What really stands out is when someone provides not only attentiveness and efficiency, but also anticipates your needs. With more and more focus on improving the customer experience, whether it’s through in-person or digital banking, banks and credit unions can use their consumer data to provide the convenience consumers expect.