Understanding how to apply data knowledge to the customer experience can set banks apart from the competition.
By Marla Pieton
Consumers expect a customized digital experience, whether ordering from Amazon, banking at a $100-billion mega bank or engaging with a local branch. JD Powers reports that 78 percent of respondents would continue using their banks if they received personalized support.
The message is clear: A personalized experience based on real-time customer data will be a significant differentiating factor. But what’s the next step in this “personalization transformation” for banks? While every financial institution may have mountains of customer data, it’s how they understand and apply it to the customer experience that can set them apart from the competition—and boost their bottom lines. Data is the great equalizer, and using data intelligently can help combat the challenges banks are dealing with in today’s volatile market.
What does your data tell you?
Banks don’t have to manually sort through all their customer data—many are likely already taking advantage of new technologies and artificial intelligence tools to make sense of data in a way that helps deliver a more personalized experience to their customers.
But let’s talk about taking that experience to the next level. By combining analysis of customer transactions with a product line utilization overview, a bank will gain insights that describe the unique financial behaviors of each customer, their spend patterns and activity with competing institutions. It allows banks to better analyze account holder behavior and spending patterns, which in turn helps develop deeper relationships.
Then, a step further: With the right intelligence behind a customer’s full financial journey, banks can reach out with relevant and timely offers and information that better serve the account holder while growing revenue in the process.
Understanding the “vital signs” of your account holders
Everyday purchase behaviors are extremely predictive of a customer’s financial priorities, and understanding these “vital signs” within account holder data can drive strategic decisions for targeted product promotion and messaging relevance.
These insights are the pulse of the account holder, and can include transactions such as unemployment deposits, checking account balances, loan payments to a competing institution and more. Diving even deeper, intelligence around engagement with services such as crypto and other channel behaviors—including online and mobile banking usage—can all be utilized to upsell and cross-sell your account holders.
Expanding share of wallet
Research has shown that financial institutions can generate a 70 percent return on initiatives targeting existing customers versus 10 percent when targeting new customers. Banks can build targeted audiences in real time—creating campaigns across multiple channels that are always relevant and engaging, no matter where customers may be in their financial journeys. Marketing can also build drip campaigns to support share of wallet activities and execute competitive win-back engagements.
A better digital banking experience also translates into a better customer experience, which in turn leads to greater customer loyalty and engagement. Alkami’s latest eBook, “Turn Digital Banking into a Profit Center,” explores how banks can activate data to meet customer expectations and drive growth. The eBook goes on to outline some real-world, practical applications for using data to drive revenue through digital banking channels, and addresses:
- Onboarding programs: Create a cohesive experience for new customers through a cadence of messaging across all channels.
- Self-service account opening: Plug in additional out-of-the-box solutions to allow for easy self-service account opening through the bank’s website and digital banking experience.
- Product cross-sell and up-sell: Use data to know which products each customer has and where they have opportunities to grow, and then deploy relevant messaging to win them.
- Competitive takeaways: Use data to know which customers are engaging with the competition, how much money is leaving the bank and then deploy relevant win-back campaigns.
- Communications and servicing opportunities: Through customer insight data, predict what customers need before they even reach out on their own. Personalize digital banking and marketing campaign experiences to guide them to the right tools and services for their unique lifestyle.
- Product utilization: Increase debit or credit card swipes and increase usage of home equity products or investments by educating customers on the benefits of each product, increasing fee income.
- Transition retail accounts into business accounts: Many people run businesses through their personal bank accounts. Gig workers, for example. Transitioning them to business accounts can add to your profits.
A bank’s commitment to setting data into action and the ability to pivot with on-demand intelligence and ongoing data insights will ultimately determine its fate in an aggressive and disruptive marketplace. Especially now, in this uncertain economy, the path forward is to focus on leveraging first-party data to drive strategic decisions that can impact acquisition, share of wallet, loyalty and growth.
Marla Pieton is director of marketing at Alkami.
ABA Banking Journal Guest Contributor
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