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Understanding Banking Customers through the Power of Data Analytics

4 April 2021

Remember the time when branch visits were the only way for banks and other financial institutions to get a glimpse of their customers’ priorities and preferences? It wasn’t that long ago when this was the norm, and yet as FinTech evolves at an increasingly rapid pace, the old ways are quickly conceding their roles to technology and all the benefits it brings. Tech is changing the financial landscape, and customers today are being understood by FIs more than ever.

The more things change, the more they stay the same; the relevance of this quote to the FinTech industry today might be surprising, but it’s true because the more technology changes the finance ecosystem, the more the needs of financial marketers stay the same, in terms of gathering valuable customer data for marketing, retargeting and service personalization purposes. Today, financial institutions are poised to leverage their digital channels to gain rich data insights into their consumer base; this includes geo-location insights due to constant connectivity through mobile devices, user behavior and preference insights enabled through social media interactions, and emerging behavioral trends made available through our increased migration to e-commerce platforms for shopping, groceries, furniture, household items, and everything else their customers buy online.

As consumers spend more time online, their behavior and habits start to shape their digital ‘persona’, and if FIs can find a way to combine their existing financial information of those customers (such as investments, payroll deposit frequencies, mortgage payments or accumulated savings) with their digital personas, they can create smarter and more personalized products and services based on these insights and therefore provide a much better overall experience for their customers.

Deep data analytics is a rejuvenating source of inside information that can accelerate innovation and foster a richer, more scalable FinTech ecosystem. Financial institutions that take a more pragmatic, customer-centric approach to their digital strategy while focusing on relevant partnerships will be able to complement their existing data with consumer-level insights to bring even richer value-adding solutions. Nurturing existing relationships with digital-first customers should also be considered a priority, as they represent the future of a financial establishment, acting as adopters of new technologies and creating their digital profiles in the process.

Rich insights, when coupled with an increasingly mobile-first population, are allowing FIs to reach out to their customers through various channels, as opposed to the traditional state of finance that previously saw institutions depending on customers to visit their branches. The tailored FinTech experience is evolving to constantly fit the dynamic needs of businesses and individuals alike, and as the technology improves through incoming data insights, the result creates a highly efficient, low-cost cycle that benefits all parties involved, bringing growth and access to safe, reliable and affordable FinTech products and services.

There are several factors that contribute to how an FI could benefit from customer data, and although it’s nowhere near a one-size-fits-all scenario, there are some fundamental ideas that financial institutions can use to leverage the power of insights:

§ Merging external data with existing financial data to get a better view of your customers, made available through reports or through establishing strategic partnerships with potential data sources.

§ Understanding consumer behavior and preferences like shopping frequency and use of credit through analyzing existing financial profiles can be a great source of inspiration for creating tailored and relevant offers, plans, and communication practices.

§ Enhancing digital onboarding efforts and online engagement strategies is essential today, and as the competition rises, so does the variety and intuitiveness of FinTech products and services. Leveraging digital channels has never been as important as it is today, and the use of data insights to retain customers and strengthen their loyalty and trust presents a great opportunity that should not be underestimated by FIs.

As FinTech applications get smarter through customer insights generated by deep and powerful data analytics, the future of the industry belongs to the vigilant FinTech companies that can see the value in using the information they have to satisfy and retain their customers on a long-term basis. Combining that concept with emerging technologies such as artificial intelligence and machine learning is bound to yield market growth, smarter financial products and services, more wholesome customer experiences, and an even brighter future for the FinTech ecosystem.