Banks have access to an amount of consumer data that organizations in other industries would kill for. New digital platforms have meant an explosion in the amount of data available about people’s financial habits. The management of transactions and the nurturing of relationships over time have provided insights into customer behavior that has enabled them to maintain a competitive edge. Some banks have been mining, analyzing, and leveraging data for decades now. These banks are, however, in the minority, and most are nowhere near as mature as they should be in their data analytics capabilities.
This failure to keep up is having a hugely detrimental impact on their ability to operate successfully. According to a new survey by business and IT services provider NTT Data Inc, one in three consumers would consider leaving their bank for a better online and mobile experience, while 71% of consumers think their bank could better support their banking needs. The root cause of this is the neglect to analyze the data being generated, particularly that generated by new kinds of consumer-facing products, like apps.
What’s really surprising is that banks are still not prioritizing data analysis. Only the largest regional and national banks (over $10billion) rank improving data and analytics capabilities in their top three priorities (47%), and just 36% of organizations plan to increase their data analytics budgets by more than 10% in 2016. The data is there, the analytical models are there, and the talent to make the data meaningful is there, so excuses for not leveraging consumer insight is really difficult to justify.