Showing posts with label modeling. Show all posts
Showing posts with label modeling. Show all posts
Thursday, June 6, 2013
Customer Analytics Is Key To Growth In Banking
Understanding customers is the foundation to a sustainable competitive advantage in banking. Therefore, financial marketers can no longer wait to embrace the power of advanced analytics to gain insights and evaluate opportunities that will improve cross-selling, up-selling and enhance share of wallet.
Financial marketers also need to extract more value from internal and external data sources, guiding product development, customer communication, innovation and growth.
First in a Series on Big Data and Banking
In a recent report from Celent entitled, "Customer Analytics in Banking: Why Here, Why Now?", senior analyst, Bob Meara writes that now is the time for banks and credit unions to leverage the advances in processing, memory, database design and analytic methods to improve performance and reduce costs. While the Celent analyst notes that some institutions are already on the path of using advanced analytics for decisioning and optimization, other organizations have only limited experience (this correlates with several other studies).
The following are the primary reasons why banks need to step up their customer analytics game:
- The New Normal: The banking industry is expected to remain revenue challenged for the foreseeable future as a result of low interest rates, moderate fee revenue, onerous regulation and a less than robust economy. As a result, it will be more important than ever for banks and credit unions to focus on all possible strategies to reduce costs and increase revenues. Some of these strategies, enabled by customer analytics include:
- Improved targeting of customer segments
- Moving from a product focus to a customer focus
- Better management (and measurement) of sales leads across channels
- Inclusion of custom customer incentives/rewards to influence behavior
- The Imperative for Customer Centricity: With customer delivery and communication channels expanding, and more customers interacting with their financial provider using online and mobile channels, always-on, real-time sales and service become imperative. Analytics can respond to the migration to digital channels by:
- Improving branch efficiency and effectiveness
- Integrating sales and service tools within a new digital environment
- Helping to drive high value, high touch traffic back to branches
- Technology Advancement: Customer analytic applications are no longer the sole domain of highly skilled specialists. Today's solutions can be accessed and used by marketers and other business users to answer complex inquiries. Improvements include:
- Collapsing of product silos and ability to process increased data sources
- Increased number of specialized vendor solutions and expanded talent
- Cloud-based solutions
Friday, March 4, 2011
Checking Changes Make Onboarding and Cross-Selling More Important
Over the past several weeks, many of the larger banks across the country have announced significant changes to their checking account continuum, including elimination of traditional Free Checking, discontinuation of rewards programs, ceasing reimbursement of foreign ATM fees, as well as potential fees and transaction limits on debit cards.
While each of these strategies are intended to reduce costs or generate revenue in response to Reg E and the Durbin Amendment, these changes could also present a challenge to banks as they seek to increase engagement and gain share of wallet. This is because debit card use and rewards program enrollment were two of the more important account engagement criteria and basis for a broader relationship growth.
While each of these strategies are intended to reduce costs or generate revenue in response to Reg E and the Durbin Amendment, these changes could also present a challenge to banks as they seek to increase engagement and gain share of wallet. This is because debit card use and rewards program enrollment were two of the more important account engagement criteria and basis for a broader relationship growth.
Friday, September 3, 2010
What's in Your Wallet?
In the past, bank marketers have relied on models based on demographic, geographic, psychographic and purchase variables to better understand their customers and prospects. Some financial institutions even use attitudinal, lifestyle or customer value segmentation to improve the targeting of their marketing communications.
As consumers are provided more and more options as to how to transact business and make payments, however, a better way to segment may be achieved by using advanced behavioral segmentation based on payment decisions. In other words, when consumers open their checkbook, reach for their wallet, turn on their computer, or use their phone, what payment option they choose may help bank marketers improve targeted engagement, channel and relationship expansion communication.
As consumers are provided more and more options as to how to transact business and make payments, however, a better way to segment may be achieved by using advanced behavioral segmentation based on payment decisions. In other words, when consumers open their checkbook, reach for their wallet, turn on their computer, or use their phone, what payment option they choose may help bank marketers improve targeted engagement, channel and relationship expansion communication.
Subscribe to:
Comments (Atom)