Using Data to Drive Consumer Financial Wellness
May 17, 2023 | 2 min read
< Back to Blog
March 24, 2017 | 0 min read
Making the transition to a culture of data analytics and targeted marketing can give your company the upper hand against the competition for years to come. We've condensed the process into 5 essential data characteristics to help give you a jumpstart. This is an excerpt of ‘The Banker’s Guide to Big Data’ whitepaper which can be downloaded here.
For marketing efforts to be most effective, it’s crucial that internal and external data be as current as possible. (We’re talking minutes or hours—not weeks or years.)
You can access external data in real-time via two methods. First, you can access it via multi-sourced account aggregation. Second, you can access it by analyzing transactions that are leaving your institution to a competitor. The best approach is to use both methods at once.
Having real-time access to external data enables you to be fully data driven, which is increasingly pivotal to modern banking. When we interviewed Anthony Thomson,1 the Founder of Metro Bank (the first bank to launch in the UK in over 100 years), he said, “We are in the data business as much as we are in the banking business.” That’s how new players think. Anything less is too slow.
Players in the financial industry want an agile experience because it’s what consumers have come to expect. These consumers visit Amazon and see recommendations based on what they just purchased; they visit Google and see results that directly match what they just searched for. They expect the same experience from their bank or credit union.
According to a recent KPMG survey,2 only one third of bankers say their financial institution has “a high degree of data and analytic literacy.” If your institution falls into the category of those who don’t have this literacy, there are two ways to fix the problem:
While a combination of both options is probably ideal, the quickest and most affordable way to solve the problem is by investing in effective data analytics software. The right software will empower your team with all the crucial data points. Once you have that power, your team can unite around analytics.
To learn more about implementing an accessible strategy for data analytics, we interviewed Parin Kothari,3 SVP of Digital Channels Strategy & Planning at TD Bank, North America. Kothari said that the key is to make sure you pay more attention to the data than to the highest paid person’s opinion. “If banks want to successfully fight the disruption coming from the likes of Silicon Valley startups, they need to flatten hierarchies and promote openness — besides listening to the data and the customers.” This openness only comes if the data is easy to digest and is accessible to all relevant parties.
It’s one thing to have access to key data sets, and another thing entirely to be able to act on that data. Any solution you implement must involve a component that lets you immediately create and launch digital campaigns. If it doesn’t, then it just provides you with “nice to know” information — interesting, but not worth investing in.
When a data analytics platform improves sales results, it pays for itself and then some. NetFinance backed up this point when they said, “Banks have goldmines of data available to them. However, it is not just about the data you collect. It’s how you mine it, interpret it and draw insights to provide personal customer experiences, which can be quickly deployed across the organization.” In other words, the full value of data hinges on whether you can act on it quickly
“You have to know what actionable insight you’d like to draw from data,” adds Alex Nakhapetian,v4 Head of Data & Direct Marketing at Global Life, Zurich Insurance Group. “This challenge is an opportunity to achieve this clarity of thinking…it becomes a beautiful thing to work through.”
You can see the beauty of actionable data in Google’s Adwords — ads that show up exactly when users are searching to learn more about a product or make a purchase. In many cases, marketers use Adwords to point to a product that’s available for purchase right then and there. What could be more actionable than that?
Financial institutions can take note of Google’s experience and make products directly available wherever they show an offer. Imagine a user who’s actively searching for a savings account when they see an offer and can click it to open that account all within a few minutes. That’s an actionable experience.
Marketers are consistently realizing that digital ads have more sway than traditional ads. This is not just because more people are online now than ever before, but also because digital ads allow marketers to target specific user segments in real time. You can see the shift by looking at how digital ad spending has grown ten times since 2001 and is now three times more than spending on newspaper ads
Again, a major part of the popularity of digital ads is that they can leverage data. Ad platforms for financial institutions should follow this lead, enabling banks and credit unions to achieve mass personalization. Brett King, author of Bank 3.0, puts it this way: “Unless the bank develops the ability to intelligently mine the data it has already and then match that with behavior or location opportunities, the likelihood that the bank will be able to deliver me an offer that meets my needs is very slim.” Matching the message to specific behavior is the essence of making your campaigns applicable — especially if the campaigns can factor in competitor account data.
One more thing: While it’s crucial to match the message with specific behavior, it’s even more crucial to add legitimate value with every interaction you have with your account holders. Otherwise you risk alienating account holders by using their data. When you create offers that are truly applicable, the way Google does, you will delight instead of irritate your users. That’s where real profitability comes from.
Any marketer knows that part of the job consists of showcasing the return on investment to your executive team. That’s why worthwhile marketing solutions include a component that shows you the effectiveness of your campaigns in real time — including how many users were targeted, how many users saw the ad, and how many users clicked it.
With this data at hand, you’ll use the lean startup methodology to refine your campaigns and quickly figure out your optimal marketing strategy. If a particular campaign falls flat, you can iterate and produce something more compelling. Soon enough you’ll know exactly what’s most effective for your institution.
The crucial piece here is that you have access to external data. As McKinsey says, “Companies must apply advanced analytics to the large amount of structured and unstructured data at their disposal to gain a 360-degree view of their customers.” You can’t get a 360-degree view if you only have internal data.
In their white paper “Getting the Most Out of Big Data,” IBM summarizes the issue perfectly: “To anticipate and execute timely, personalized interactions, banks need deep insight into the customer experience, both on an individual basis and in an aggregated format to accommodate demographic behavior.” With this analytical view of demographic behavior, you’ll be set to develop a solid ongoing marketing strategy.
May 17, 2023 | 2 min read
March 21, 2023 | 1 min read
October 14, 2022 | 1 min read