The financial services industry has a vast reservoir of data on their customers, but is in the infancy stage of utilizing this data for financial or competitive gain.
The vast majority of banking and financial firms globally believe that the use of insight and analytics creates a competitive advantage. The industry also realizes that they are sitting on a vast reservoir of data and insight that can be leveraged for product development, personalized marketing and advisory benefits.
in the past, most ‘big data’ strategies being implemented by the financial services industry have begun by initially identifying business requirements, then leveraging existing infrastructure, data sources and analytic capabilities before incrementally expanding sources of data, technology and analytic tools. This ‘slow to go’ progression, while viable in the past is not keeping up with consumer expectations on how they want their financial partners to partner with them.
It should be noted that the progress with almost any data initiative in the financial services industry is directly correlated to the size of organization due to the investment required and current infrastructure of the organization. Despite the size of organization, however, customer-centric objectives dominate the focus of most data activities in the banking industry. In fact, according to the Digital Banking Report, Improving the Customer Experience in Banking, over 80% of financial services organizations globally indicated that customer experience was a top 3 priority.
Focusing on the customer is increasingly important as channels for transacting and communicating continue to increase, developing new segments of customers based on the ways(s) they want to perform transactions and hear from their bank and credit union. Through this customer-centric focus, the customer experience should improve as financial institutions can better anticipate customer needs in a multichannel environment.
Financial organizations also must use data and advanced analytics for fraud and risk mitigation and achieving regulatory and compliance objectives. With cybersecurity more important than ever, falling behind in the use of data for security purposes is not an option.
While the majority of institutions might have much of the infrastructure in place to manage the increasing flow of data, significantly fewer have their data integrated across silos. This continues to be a challenge as customer expect their financial organization to understand their entire relationship when working with their bank or credit union. This challenge is obviously exacerbated with smaller organizations who may not even have a CRM system in place.
