Using Data to Drive Consumer Financial Wellness
May 17, 2023 | 2 min read
Data is the topic that every financial institution is talking about – it seems to be everything to their future. There are many ways that data is accessed, and there are a variety of tools that are available for gathering and analyzing it.
But how does a bank use data to improve its operations?
A variety of applications and methods exist to turn information into a powerful tool that enhances the way banks operate. Here’s a look at just a few of the options available.
Many financial institutions are feeling the pressure from non-traditional banking services and a larger number of startups. Many find they are facing a shrinking customer base. Yet, this is not because fewer customers want to invest their money in banks, but rather a lack of providing the customer with the type of service they want and need. Data analytics can help a financial institution to gain insight into why they are losing customers and, as a result, utilize that information to turn customers around.
For example, artificial intelligence applications can go to work polling and gathering insight into why customers leave. What types of actions do they take before they decide to close their account? More so, what information do they provide about why they are leaving? This information can then be used to create campaigns to reduce customer churn.
Customers need information and service immediately. They no longer can or will wait for the bank to be available to them. They wish to log into their account online and speak to someone immediately – even during non-traditional bank hours. Yet, this is no longer feasible for many banks who are trying to reduce labor costs.
A solution is to empower chatbots. These highly effective and incredibly intelligent tools go to work for banks to communicate with customers on a larger scale. They can answer questions, guide decision making, and even create comprehensive profiles of customers to allow for better learning later.
One of the ways many businesses can benefit from the use of data is by using it to provide better services to customers. For example, it is possible to gather information from customer transactions, turn around, and utilize that information to target key customers with key offerings. Here are a few simple examples.
The key here is to use data from customers to learn what is happening in their lives that could provide potential opportunities for providing that individual with a unique offer. Done with automation, there’s no risk of a “no” answer.
A key concern for many of today’s consumers is knowing their personal information is safe. They also need to know that the financial institution they are working with is on their side when it comes to identity theft. The sooner these actions are noted – often done through automated means – the sooner they can be stopped, and the consumer’s information is protected.
Through data, it is possible to learn what the customer's traditional habits are. From this information, it becomes very fast for a software tool to notice fraudulent activity and stop it from occurring. This does several things. It protects the customer’s information and funds. It also helps the bank to avoid a reputation concern due to allowing access to consumer data. And, it ensures that all compliance measures are in place.
Data is not a simple term. It is one that has many facets to it. Yet, gaining customer insights and providing a higher level of service is exactly what today’s customer is demanding. Whether you plan to offer specialized portfolio management services to affluent clients or basic checking accounts to seniors in high school, data, artificial intelligence, and automation are going to provide you with the tools and resources you need to improve your customer experience. This helps reduce customer churn, but it also allows for your investment dollars to go where they are most effectively used.
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