Customer 360: You Know All About Your Banking Customers. You Just Don’t Know What You Know.

Blog 18-1 MFischer

by Michael Fischer, January 12, 2018

How much do you truly know about the customers that your financial institution serves? Most organizations have legacy CIM / MDM systems, and many have migrated to CRM applications such as Salesforce or Dynamics for centralized location and organization of contact info, accounts, transactions, sales history, etc. in an effort to service their customers, develop and nurture leads, and gain insight. These capabilities are fine for a Customer Service / Operations Team, but what about Digital Marketing, Loan Origination, or Risk and Compliance?

How much do you know about their likes and dislikes? About the members of their household and their extended network of friends and family? About their financial fears and concerns? About their opinion of the services you provide to them? About products or services they are considering and ways that you could make your service of more value to them?

If your financial institution is like most these days, the truth is that you know a great deal about your customers. And the problem is that you don’t know what you know about your customers.

Data, Data, Everywhere…

Back in your school days, you might have been coerced into reading an iconic old poem called The Rime of the Ancient Mariner.

In the poem, a salty old sailor’s windjammer is stranded in the midst of a becalmed ocean. As time drags on and the freshwater stores aboard the ship are exhausted, the old sailor finds himself on the verge of a bitter irony: dying of thirst while surrounded by undrinkable water. In frustration, he cries “water, water, everywhere, nor any drop to drink.”

The plight of the poor old sailor, strangely enough, is quite similar to that faced by many modern banks — including, most likely, your bank. Substitute data for water, and the situation is much the same: data, data, everywhere, but little that can be put to use.

Most banks have amassed a wealth of customer data. In fact, the banking industry, on the whole, has acquired massive amounts of customer data — especially in comparison to most other industries. There’s data virtually everywhere, distributed throughout a variety of business divisions, applications, and repositories throughout the organization. Additionally, there are tremendous opportunities for ingestion and integration of external data sets to enrich internally collected/produced customer data that can yield insights and targeted opportunities not previously possible.

Although most banks have no shortage of data, it’s the poor use of that data that hampers their abilities to gain competitive advantage. Many are beginning to address these challenges with Customer 360, Customer Segmentation, Householding, Campaign Management, Targeted Offers, and Top of Wallet initiatives, just to name a few. The problem is, legacy technology and traditional approaches don’t resolve the data management challenges.

What You Don’t Know Can’t Help You

According to an old saying, what you don’t know won’t hurt you. But what you don’t know also won’t help you. That’s the problem most financial institutions face with their customer data. The data is there, but it’s typically fragmented and siloed across multiple Lines of Business and/or a range of focused interests:

  • Core banking
  • CRM
  • Loan Origination and Servicing
  • AML
  • Payments/Wires
  • Sales and Marketing
  • Credit Card Services

And there’s another problem: many of the precious bits and pieces of information gleaned about customers these days are unstructured (think call center recordings, voicemails, texts, online chats, click streams, etc..) and just don’t mesh well with the legacy data storage and management systems in use in many institutions.

Attempting to sort, store, manage, integrate, analyze, and relate both the structured and unstructured data that pour in every day is difficult or even futile with legacy data architectures and master data management systems. Graph databases and time series analysis, for example, offer significantly deeper insight into Customer interactions

Data, data, everywhere — but you can’t find it, and you can’t use it. And what you don’t know will hurt you.

The Power of Actionable Customer Data

According to a recent survey (2016 Global Consumer Banking Survey) conducted by financial consultancy EY, banking professionals have reason to be worried. More than 50,000 banking consumers polled in 32 countries revealed trends that threaten traditional banks:

  • 4 in 10 customers state that they are decreasingly dependent upon a traditional bank
  • 4 in 10 have also used non-bank financial services providers in the past year
  • 1 in 5 who haven’t yet used non-bank financial services intend to do so in the near future

Additionally, it is estimated that nearly half of all banking customers will not visit a branch in 2018. Couple that with the massive disruption occurring by Fintechs and data-driven AI / Machine Learning powered Robo-advisors and it’s easy to see that the traditional banking industry is facing existential threats. So, why are customers moving away from traditional banking?

The survey provides a blunt answer: “A lack of deep and granular insights into customer preferences and behaviors means many banks are struggling with how and when to interact with customers and are unable to deliver the services and experiences consumers expect.”

And that is why banks must harness the customer data that they already have, enrich it with external data and use it to develop those “…deep and granular insights…” to deliver the refined and targeted products and services that their customers want and need. Mining that customer data for actionable insights can yield a wealth of benefits, including:

  • Better-identified customers
  • Ability to segment customers and target like customers, family, friends, associates, similar businesses, etc.
  • Enhanced customer service (the ability to offer targeted and personalized services)
  • New business opportunities identified
  • Enabling of true one-to-one marketing and customer engagement
  • Improved identification of bad actors in the fight against money laundering and fraud
  • Enhanced compliance with government-mandated regulations
  • Ability to understand the sentiment and buying patterns/behaviors to better manage campaigns and serve-up targeted offers, cross-sell, up-sell, etc.
  • Ability to assess customer retention/profitability, and perform churn analysis ‘ determine attrition propensity

All of those benefits, and many more, are available to financial institutions that harness customer data in developing a complete, fully integrated and well-understood profile of their customers and ultimately the associated analytics — or, to put it differently, a 360° view of customers.

Expanding Your Customer View to 360 Degrees

So, how do you leverage and make use of the customer data that’s scattered across so many siloed repositories and special interests?

Ingesting, integrating and enriching all of your customer data into a data lake is the answer. Doing so can make every bit of customer data easily available to the entire organization. A data lake also supports the creation and maintenance of an organization-wide single-version-of-truth for each of the organization’s customers. As the saying goes, Data Warehouses were designed and built for reporting; Data Lakes are designed and built for analytics and offer unmatched flexibility, scalability, and extendability.

RCG leverages its industry domain experience and expertise along with its RCG|enable™ Data Framework and Accelerators; including configuration based (No Code) Visualized Data Management and Integration processes to greatly accelerate speed to value, reduce implementation costs, simply ongoing support and maintenance and produce demonstrable results to the business in hours to days vs. the traditional weeks to months. Our innovative approach completely disrupts the traditional Data Management and Data Integration lifecycles. Modern Data Architecture leveraging Hadoop, Spark, Machine Learning, and Artificial Intelligence is how RCG customers in the banking industry are finally harnessing their vast resources of customer data and achieving competitive advantage.

Data, data, everywhere. And a new world of opportunity awaiting. All you have to do is leverage that data in developing a comprehensive 360° view of your customers.

Take the first step toward developing a true 360° view of your customers.

To Learn more:

Read more about our Customer 360 solutions and  Big Data solutions

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