It almost seems that no matter where you are, you look at your favourite newspaper and you are assailed by successive stories about problems in the banking world.
The seemingly interminable fallout from Brexit, another case of fraud – this veritable litany of financial crises and misdemeanours drops like ticker-tape smeared with rumour and innuendo, influencing the public’s notion of what banks actually do.
It comes as little surprise therefore, that despite the industry’s healthy growth and the integral role played by banks in society for hundreds of years, the public regard the banking community with suspicion.
It is the security breaches, lack of service development and poor customer service that are at the forefront of the public mind, while those within the industry cast a glance skyward and play down all such concerns.
Winning them overTo regain customer confidence and maintain their place in the face of radical digital disruption, individual banks (as well as the industry as a whole) need to conduct a thorough examination of their traditional business models and operational practices.
Banks need to take some practical steps towards turning into data-driven business opportunities the obstacles that distort consumer understanding.
Payments dataStart with the most under-appreciated dataset.
Payments reveal a great deal about each user – how much they’ve paid, what they paid for, who was paid, the banks involved, transaction time and location, and so on.
In fact, a customer’s payment profile says much more about her, or him, than any social media metric or record. Payments data is highly accessible and can pinpoint lifestyles, detect which companies make up a supply chain, and plot spending trends by time or place.
At the same time, although customer data is not as dynamic as payments data, in banking systems it can be attached to other profiles such as payments and credit history to enhance analytics and create successful “Next-Best-Offers”.
Fintech sensibilitiesShould banks be worried about the Fintech boom? Not necessarily.
Banks have both the resources and the ability to retain their position in a way that start-ups really don’t. They just need to adopt a bit of Fintech thinking.
Banks can try some of these simple and practical things in the short term that could make a significant difference.
1. Play with some data around a recommendation engine
It can be done as an experiment with a few people. Group customers by preference, products by customer, and transactions by pattern similarity.
Everyone’s always looking for the elusive ‘single customer view’, but guess what? A ‘partial customer view’ linking 2 to 3 product portfolios is already enough to get started