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How Banks Can Leverage Data Analysis For A Better Customer Experience

By Michael Deely

Data Analysis For Middle-Market BanksIn today’s competitive banking environment, middle-market banks and financial institutions of all sizes have to become more efficient than ever, particularly when using all available data to drive new revenue and growth. But greater organizational effectiveness isn’t just about your efficiency ratio or banking compliance strategy: You need to think about how to enhance your customer experience through improved data analysis.

Improving The Customer Experience

Improving the customer experience requires truly understanding your customers and relating to them in ways that they understand. This includes taking a 360-degree view of your banking customer and leveraging the gold mine of data available to you today, including:
  • Core customer information (including contact and location data)
  • Additional experiential customer information (gathered from all stages of the customer lifecycle)
  • Transaction information (including checking, savings and credit card transactions; loan draws and repayments; investment positions and balances)
  • Customer service data
  • Social media information

So what role does data analysis play in improving the customer experience at your bank? When you pull all customer experience data together to drive more meaningful insights, you’re able to drive increased profits at the customer level.

Putting Data Into Action

Banks of every size are drenched with data, but harnessing and leveraging that organizational data for more effective banking operations has always been a challenge. In the current market, it’s more important than ever that you understand your customer, your products, your channels and your pricing – all to ensure you’re tailoring product offerings to your customers’ stages of life and maximizing their potential revenue.

Using transaction and core customer information, you can determine the life stages and family dynamics that allow for better product bundling and targeted marketing for your customers. If possible, target these products and messages to the life stages customers will be experiencing in the near future.

Important life stages to consider:
  • Entering college
  • Graduating college and entering the workforce
  • Marriage
  • First children
  • Children entering college
  • Retirement Planning/Retirement

Each of these life stages has different product and pricing needs, and by conducting a thorough data analysis on transaction information coupled with social media, you’re able to anticipate your customers’ needs before they reach the next stage.

When harnessing this data, seize the opportunity to educate your customers on their next stage of life and what they can expect financially – this value-added service will differentiate you from the competition and increase customer loyalty.

Conducting Your Data Analysis

One the biggest challenges in driving these new customer experience insights is the act of pulling together all the available data into one place. Without the right data analysis tools and methods, sourcing and normalizing all of your data becomes a tremendous challenge.

Disparate systems and structures make it difficult for you to align and consolidate customer information, so it’s important that you prioritize the merging of these data systems. Then, once your data is consolidated, focus on assessing data quality and consistency.

While these efforts seem monumental upfront, you reap the rewards of more accurate and reliable insights from your data analysis. (You may want to consider partnering with a banking operations specialist who is already adept at mapping, consolidating and analyzing banking information like yours.)

Once your data has been collected and consolidated, use data analysis methods such as predictive analytics to drive more customer insights, targeted marketing and product alignment at the individual customer level. When you do, you’ll be glad you invested the effort.

While watching efficiency ratios and crafting compliance strategies are always important factors for more effective banking operations, you should never forget about improving your overall customer experience. By harnessing the power of data analysis, you’ll have the insight you need to provide customers with the experience of a lifetime.

Whether you run a middle-market bank or a financial institution of a different size, you need to be prepared and stay competitive in this post-recession economy. Click below to download a free whitepaper from Big Sky Associates and discover how process improvement and deeper data analysis directly benefit your bank’s bottom line.

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