In an era of information, the use of Big Data analytics in the banking and financial services in India can be traced back to the early 2000s and the bank with the most actionable insights is the winner. While more than 70% of the banking executives worldwide say customer centricity is important to them, this requires a deeper understanding of customer needs. However, research has indicated that only 37% of the customers believe that banks understand their needs and preferences adequately. Every transaction is a nugget of information, if pulled together and analysed, can reveal unmatched insights into customers’ needs.
Banks, however, are using only a small portion of this data to glean insights that can enhance customer experience. Research indicates that less than half of the banks analyse customers’ external data, such as social media activities and online behaviour. Despite having knowledge of the impact of big data analytics, a majority of banks have not translated this into on ground investments.
Smart banks will however, use big data to act differently, to create a 360-degree view of each customer based on how each and every one individually uses mobile or online banking, ATMs, branch banking or other channels. Instead of remaining product centric or segment centric, these firms will become truly customer centric for the first time. Big Data will allow more personalised approaches to selling products that are best suited for the customer and are timed correctly.This translates to higher acceptance rates, increased customer satisfaction, streamlined infrastructure costs and increased bank profitability. Secondly, being able to proactively resolve service delivery issues remains critical for a bank to minimise resources and costs.
Big Data analytics allows banks to successfully deliver performance management platforms to drive productivity and service delivery across branches or operational centres. It also allows better credit risk management – ranging from granting of facilities to mitigating fraud. Research has indicated that banks which apply analytics to customer data have a four-percentage point lead in market share over banks that do not. This integrated data feed into the bank’s CRM solution , can supply the call centre with more relevant leads. As well as recommendations to the bank’s web team on improving customer engagement on the bank’s website. As a result, the bank’s lead conversion rate can be improved by over 100% and customers receive an enhanced and personalized experience. Big data analytics can also aid banks to unlock opportunities to drive top line growth and help limit customer attrition.
Better customer service and loyalty begins and ends with a better understanding of what customers need now and anticipation of what they’ll need tomorrow. The age of treating customers as segments is over for good. To win and keep clients, you have to know and cater to them as the individuals that they are. And this is where banks can bank on big data analytics to help personalise customer services.