Banks are some of the most data rich organisations on the planet, but the value of that data is rarely realised as much of it sits in silos. Data is often trapped in legacy systems that cannot support the kind of advanced data management and analytics capabilities that will redefine the banking value proposition of the future.
Customers increasingly expect personalised experiences
Personalisation has come a long way from simply putting someone’s name on a marketing email. Digital retail giants have taken a forensic approach to understanding customer behaviours and then automating their personalisation programmes so that the next product suggested to purchase is exactly the right one, via the right channel at the right moment.
By contrast banks are seriously behind when it comes to exploiting their data resources and channeling them into personalised customer experiences. Digital challengers, running on cloud-based platforms built for the age of data connectivity, are better positioned to make use of data, but they lack the traditional banks’ resources when it comes to the sheer volume of data held on each customer.
This apparent disadvantage is being undermined by the arrival of open banking, which is allowing challengers to increasingly access that hard won historical data and put it to use in their modern technology systems to deliver a superior customer experience.
A digital banking platform can unlock the value of a traditional bank’s data stores
Digital investment platforms offer a way round traditional legacy systems and can grant traditional banks with next generation technologies in a matter of months as opposed to the years required by homegrown digital transformation projects. They offer a number of advantages that can help banks make better use of the data they already hold to deliver the personalised experience that will engage their customer and make them less vulnerable to the encroachments of challenger rivals:
- Data centralisation: Digital banking platforms can work alongside banks’ existing systems, extracting data from siloed processes and repositories to combine, organise and pool it in a central location in the cloud, where it can be drawn down and used anywhere in the bank’s digital ecosystem to deliver a personalised customer experience.
- Data enrichment: Through pre-integrations and the use of APIs, digital banking platforms can also enrich bank data in the cloud with streams of data from external sources. This means that a bank’s pre-existing wealth of data can be further enhanced by other useful information, for example significant life events, that will fuel how the bank talks to that customer.
- Real time response: The analytics in a digital banking platform can be used to enable real-time decision making, for example, real-time risk scoring to speed up loan origination processes. It can also be used for real-time event detection, the platform should be able to detect key customer events enabling the bank to automate an immediate and appropriate response, for example a targeted offer, across multiple channels.
- Hyper-personalisation: DBP offers the capabilities to create hyper personalised contextual banking, taking customer insights and environmental data to make digital banking experiences more tailored to each individual.
The future is open and deeply personal
Data-driven contextual banking is the foundation of the hyper personalised experiences that consumers are coming to expect. This approach can help the bank to take on more of a ‘trusted advisor’ role, providing a 360 degree view of the customer so the bank can anticipate needs and serve them as they emerge.
Open banking is the future for the industry and data sharing will become the norm, whether this becomes mandated in a regulatory capacity or not. A digital banking platform will set any traditional bank up to succeed in an expanded financial services ecosystem, whatever role they choose for themselves within that.
If you'd like to discuss how to use a digital banking platform to unlock the value of your data stores, then let's start a conversation.