Implement a customer-centric approach

Financial institutions need to better understand customer behavior and sentiment.

With businesses around the world having been forced to transform overnight from the onset of the pandemic, the service and satisfaction of customers of banks and financial services institutions have become the new battleground for them. Today’s customers expect organizations to understand their growing needs and preferences while delivering an exceptional customer experience every step of the way, from discovery to transaction. Therefore, financial institutions are actively striving to deliver a seamless experience through an intelligent balance of human and machine workers.

Financial institutions need to better understand customer behavior and sentiment. This makes it possible to develop tailor-made products and services that deliver their offers with a personalized message through the right channel and at the right time. To achieve this, organizations are upgrading back-office technologies, including core banking systems, payment platforms, and marketing solutions. They are also embracing agile computing and partnering with innovative fintech startups to not only differentiate themselves from the competition, but to survive in today’s hyper-digital and open banking industry. Companies are also modernizing their analytics capabilities, hiring certified data scientists, adopting artificial intelligence (AI) and machine learning (ML) technologies, and building new cloud data ware houses and data lakes to gain insights. more accurate and usable.

But while digital transformation and investment in analytics are important, many of these investments in customer experience will struggle to deliver business value due to long-standing deficiencies in how banks integrate, manage, govern and protect their most valuable asset – their data.

Data as a business imperative

Covid-19 has accelerated the need to be more digital and data-driven in customer interactions, services and transactions. With digital interactions rapidly becoming the norm, consumers are demanding a more personalized and tailored experience from the organizations they do business with. Companies must respond to the changing needs of their customers, while anticipating what will become the customer-centric model in a post-Covid world.

By harnessing the power of data through AI and advanced analytics, financial institutions can gain a holistic understanding of their customers and the current and future state of their business relationships. For example, the Greater Bank of Australia has set a goal of moving completely to the cloud in less than two years, placing its data strategy at the center of this transformation. The bank deployed an enterprise data catalog to quickly discover and move data to power internal and external reports. This, in turn, will enable wider use of a data analytics platform on Google Cloud.

With its cloud-native and AI-driven approach, it has succeeded in driving greater business value through secure open banking and improved customer service. By creating more meaningful engagement, Greater Bank can offer its customers the right product or service at the right time. It’s no surprise that the organization is continually recognized by financial bodies for being a leader in banking services and customer relations.

The rise of digital

While digital banking has been around for many years, the adoption of mobile banking has given way to digital and contactless banking, which has become a new way of life, and this behavior will continue. According to the McKinsey Global Banking Annual Review1, customer interest in digital banking is on the rise in many markets. In the UK and US, 10-15% of consumers are more interested in digital banking services than before the pandemic; and in some markets like Mexico and Singapore, that number jumps to 30-40%. This means that financial institutions will need to boost their digital transformation initiatives to meet the increased demand.

Take the example of the Union Bank of the Philippines (UnionBank). UnionBank, a digital pioneer that launched the first banking website in the Philippines in 1999, plans to become a purely digital bank within two years. It will achieve this by giving its customers digital services on their mobile devices. It’s proof that data security and privacy play an important role in delivering a seamless customer experience.

For UnionBank, in order to ensure the security of digital banking services, it will have to compile and maintain complete and accurate personal data for each of its customers, including names, addresses, contact details, nationality as well as date and place of birth. . Customer data is also needed to support the bank’s know-your-customer initiatives, to identify opportunities to cross-sell and up-sell financial products such as loans, and to better manage risk. of fraud. In addition, UnionBank must comply with the Anti-Money Laundering Act of 2001 (AMLA), which requires banks in the Philippines to report large and suspicious transactions within five days to identify potential money laundering activity. money. As UnionBank gains customers and deposit accounts, it must ensure that it can continue to meet AMLA reporting deadlines and expedite them if possible, while avoiding the pitfalls of “bad data”.

Bringing the project to life

To meet these demands, UnionBank’s strategy is to leverage the growing mobile penetration in the Philippines and use digital as a cornerstone to reach more customers and grow deposits and revenue. But like all banks, especially those serving emerging markets, it recognizes the need to identify and address any data quality issues so efforts are not wasted.

By leveraging a master data management solution and creating what is essentially a “golden record” for customer data – then automating data cleansing to ensure quality – UnionBank has been able to establish a single, trusted view of every customer, consistent across platforms. This provides the organization with the operational capability to monitor the overall health of its customer information to proactively manage data integrity risks. UnionBank managed to improve data quality from 35% to 100% in just one year, increasing opportunities to cross-sell and up-sell with customers while helping the bank prevent money laundering activities. It also speeds up the loan approval process from weeks to minutes, further improving customer service and allowing for faster revenue recognition. Thanks to its “golden record”, the bank knows if a customer is in good standing and can approve a loan in less than three minutes. With UnionBank better able to serve its customers, its online user base has grown rapidly.

A look into the future

Like so many other industries, the financial services sector continues to struggle with a challenging business environment in the wake of the pandemic. Historically low interest rates, combined with a highly commoditized industry filled with competitors, have underscored the importance of customer experience. Financial institutions of all sizes will continue to accelerate their investments in digital transformation to modernize applications and analytics at a rapid pace. As important as these initiatives are, these investments will struggle to operate and deliver business value if the underlying data required in these systems is not fit for purpose. Any organization that struggles with the accessibility, quality, and usability of its data should consider addressing it with smart investments to improve how it manages, governs, and uses data for customer experience success. .

1 McKinsey & Company, “Global Banking Annual Review 2020: A test of resilience: Banking through the crisis, and beyond,” 9/12/20

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Implement a customer-centric approach

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