3 actions to leverage Big Data in banking to win the customer engagement battle in 2018

Big Data is going to impact on business and operational models of banks. And when it comes to activities related to customers, it will transform the customer engagement as well. A great example is that banks can use [and some are using] customer purchase data to offer them to get consumer loans within seconds.

Enhancing consumer engagement is one of banks’ key goals. But as technology advances, customer engagement processes are changing quickly and Big Data becomes an important part of it. To boost engagement banks must use data to understand how multichannel consumers choose to engage, learn who their consumers are, what they want and when.

In the era of Big Data many banks are trying to find ways to leverage sales data, transactional data, and social data to shape actions, decisions and predictions. They are trying to explore Big Data not to be the losers in customer engagement battle.

Sustainability of data-driven customer engagement will require a dynamic and iterative value generation process. In this context the banks’ role will be to learn to create complete 360 degree pictures of customers as individuals, rather than as broad demographics, and then use this insighs to capture and pass value back to customers in order to win the customer engagement battle. Below are 3 most important actions banks need to consider in 2018 to win the battle of customer engagement.

Consumers are no longer satisfied with the bank telling them what has already occurred. They want their bank to know them, look out for them and notify them for events that probably will occur in the future. Imagine the difference between a bank telling the customer the monthly loan repayment size, and a bank that is also telling when to pay it in order to suppress a customer’s cash flow. Consumers want to be advised about the best actions they should take for their specific journey.

Different banks reach this in different ways, based on where they are on the data analytics continuum today. Some banks are still experimenting deployments of Big Data solution, others are already applying advanced analytics [including artificial intelligence (AI) and machine learning] to improve the consumer experience.

Consumers, especially millennials, want to interact with their bank from any place, any time, and how they want. Beyond the ability to open or apply for new bank account, consumers want their bank to get to the point of “know me” as quickly as possible. Basically that means that customers are expecting their bank to “understand” them better and deeper in order to “reward” them.

Today, the vast majority of shopping for any consumer product is done using a computer or mobile device. For financial services this is more actual than many bank executives think. As consumers in all age categories become more comfortable with digital technology and devices, the shopping experience may even include voice commands in the future. This means shopping behavior for financial services is going to change dramatically. The question is — are banks prepared for this shift? This seismic shift in shopping behavior will have profound implications for the banks in terms of gathering very comprehensive customer data and then leveraging this to offer very tailored services to each customer. The changing banking habits [especially in case of millennials] are an important fact to consider when it comes to reinforcing the customer engagement with the bank, as customers with “digital mindset” will more and more shift from branch to new channels. This explicitly will open new opportunities for banks to access very diverse customer data and use it towards customer engagement.

As a result, the importance of investing in digital capabilities has never been greater. But automated data collection alone can’t increase customer attraction, retention, and engagement. Banks should also embrace AI/ML technologies to better understand their behavior and engage with customers in order to meet their ever-changing needs. With consumers changing their shopping habits and being more and more keen to digital channels, coming in third is not a viable long-term strategy. But on the other hand banks should foresee investments to deploy new digital technologies (Are they READY?). To be in customers mind a bank should have not only a strong digital banking offering, but explore different and untapped channels to distribute this offering.

Having a successful digital-banking customer engagement in place requires a marriage of traditional consumer research and a deep, real-time understanding of the behavior and pain points of individual customers. This means a constant and rapid changes in banking should welcome Big Data applications and experimental mindset to win the customer engagement battle.

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