Banks hold as much information about their customer as any other type of business. In an unstable, insecure time, they also enjoy a level of trust from clients that retail, travel, or mobile phone companies would be ecstatic to receive.
As a new study shows, however, trust and intimacy are two very different things.
The new consumer banking survey by NGDATA suggests a need for expanded data collection and analysis strategies throughout the banking sector. The survey of 500 customers of American banks, which covered satisfaction, service, loyalty, and customer behaviors, revealed that 42.2 percent of customers consider customer service the most important factor when selecting a bank, more important than bank location (24.3 percent) and products like financial rates and loans (11.5 percent). While online is the dominant channel customers use to interact with their bank (49.4 percent), 37.9 percent conduct business in person at a branch, and 12.6 percent by phone. All of these choices and interactions are sources of rich data that banks can use to market directly to the individual client.
Most importantly, though, only 20.1 percent of respondents said they are very confident that their bank understands them. In many ways, every time a person logs on to check their account or uses an ATM, the modern banking customer feels like a stranger.
Data Informed caught up with NGDATA CEO Luc Burgelman, who spoke about the survey and how the responses drive home the importance of data in every aspect of banking today.
Data Informed: How can banks use data to make customers feel known and valued?
Luc Burgelman: One of the interesting findings is the loyalty aspect. Banking used to be an industry where everybody was loyal, irrespective of satisfaction. That seems to be changing. It’s only 20 percent (of respondents) who feel confident the bank knows them very well. That means 80 percent has doubts that the bank knows them. It’s very important that banks start to know the customers.
In retail, you can capture a lot about the person just based on online behavior. There are more and more resources online. So based on the product people are clicking on, you can build an interesting profile. In banking, that’s not the case. You go on your bank website and all you do is check your account.
But banks … need to draw data from your credit card usage, from the call that you make to the bank, from your payments, how much your salary is, all those things. They have all the data, very interesting data—more than a retail store would have—but the challenge is in bringing the data together.
Customers have so many options when managing their money.
Burgelman: Banking is still a multi-channel space. You need to have all the input together from all the sources. You need to capture all the interactions the customer has with you.
You want to avoid a situation where the customer comes in and you don’t know that he’s been looking at loans all morning online.
What should banks have as far as data capture and analytic assets?
Burgelman: They should have data on an individual level. And have it in real time. Otherwise, you don’t have the latest information, which is usually the most relevant information. That means that every data source has to be translated—language processing for calls, for example.
What becomes really relevant is information and applications that the business side can use. Your marketer needs to know who they need to talk to. And in the end, they probably need to automate a lot of these processes. In real time, the customer can get transactions that are really relevant.
What’s the relationship between data and loyalty for banks?
Burgelman: There is definitely a relationship between loyalty and satisfaction. Loyalty is going to be more and more crucial because people can get Google accounts and PayPal and those kinds of things, so the bank needs to focus on the relationship with the customer to keep that relationship.
That means offering the right things at the right time. Not bothering people when it’s not relevant. You can only do that when you … bring together the right information. You get loyalty when you increase satisfaction, when you can sell multiple products.
And the customer’s opinion is no longer a private matter. How are banks responding to customer sentiments expressed on social media?
Burgelman: (Customer sentiment) is important to the extent that bad news is always bad. It’s important as more generic, brand-value analysis. It is less helpful in using the knowledge on a specific person.
We’ve been doing a couple of projects for wealth management. We see that when people have to wait for 90 seconds on an Interactive Voice Response system, they hang up. That’s an indication of decreasing satisfaction.
Will we see a change in the banking skillset to include data awareness as a fundamental capability?
Burgelman: I think there’s going to be a need for a real shift. The whole thing about actionable data is really becoming fundamental, and if you’re head of marketing or sales, and you’re not data savvy, I see it as a problem.
And your data scientist has to be a big data scientist—they need to be able to handle large volumes of data. Whatever they do, the business has to be able to use it directly. It’s not like 1 percent of the employees sit in the corner and make graphs anymore. The strategy really needs to be something that changes the way of working.
Joshua Whitney Allen has been writing for fifteen years. He has contributed articles on technology, human rights, politics, environmental affairs, and society to several publications throughout the United States.
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