The general mindset on what is meaningfully achievable by mining various data sets is changing fast.
Banks have typically been ahead of other industries in terms of collecting and managing data. They are early adopters of analytics, especially in the areas of risk management and operations.
Increasingly, a large number of banks and financial services firms are now focusing on leveraging data as a key determinant in creating personalized experiences and services for customers.
“Banks are now leveraging analytics to derive deep insights to understand their customers and are hyper-personalizing products such as payments and mortgages,” says Venkatesh SG, Senior Vice President, BFSI at ITC Infotech.
It’s critical for firms to now render relevant and contextual products/ services to customers in today’s digital era. Personalized products, in combination with tailor-made experiences, offered through the right channel—be it digital or human—is the winning formula for banks today, he adds.
For instance, if a bank can predict that a customer is about to get married, it can then pitch a product that will be attractive for that customer at that point in time – probably a gold locker account or a life insurance to protect the family.Sethu Chidambaram , Head -- Analytics & Cross Sell, Bank Bazaar, says,
“For a long time now, banks have had so much data related to a customer's financial profile — transaction history, income levels, spending patterns, investments, details regarding various financial instruments, etc. What has changed in the last few years is the general mindset on what is meaningfully achievable by mining these data sets.”
He believes that targeted and personalized digital communications tend to have much better RoI than traditional methods of marketing in a number of use cases.
“When personalized products are offered along with a set of tailored experiences across digital and human channels, the adoption of these products goes up many fold,” Venkatesh of ITC reinforces.
Analytics is also being used effectively by banks to identify people who are not satisfied customers, and are likely to churn. Identifying these customers, understanding their needs, making them feel special through personalization techniques and adding value to their journeys by anticipating and supporting their needs are all part of the process to build connect and retain customers. And data is the essential element in this process.“In the future we anticipate banks, along with their partner ecosystem, to leverage concepts of big data analytics, behavioral sciences and AI to sharpen their service offerings to enable consumer financial well-being, mitigating risk and building loyalty more effectively” sums up Venkatesh.