Data and analytics have been buzzwords for years in the financial services industry, but only recently have banks started using data analytics to meaningfully drive revenue and improve the customer experience. Today, banks on the leading edge are using advanced analytics to inform and prioritize among marketing campaigns, and then automate those campaigns so that dozens, if not hundreds, can be run simultaneously by financial institutions of any size.
Growing revenue in a responsible way has always been a challenge for banks, but it’s not the growing part that’s hard. A bank can grow revenue by simply easing underwriting standards and boosting loan volumes. But this increases credit risk, leading to higher charge-offs in the future. Thus, this is not an ideal growth strategy for long-term success. The challenge is to grow revenue responsibly, ideally in a way that doesn’t require regular infusions of capital.
The solution to responsible revenue growth and improved customer experience lies in leveraging data and analytics. Using data analytics is an exceptional way for banks to identify the best time and place to engage with specific customers, while also informing the design and content of marketing campaigns themselves.
“Data analytics offers another solution to growing revenue in a responsible way. It does so by giving banks a tool to fortify their marketing efforts.”
Beyond helping banks drive revenue, data also plays a central role in the customer experience. This is especially true with Millennials and Gen Z, who, together, made up 46% of the U.S. workforce in 2021. Big data can be leveraged to provide this generation with the seamless digital experience that they expect from large companies like Apple and Facebook. Marketing to millennials involves a digital-first mindset – meeting the customer where they are and providing them with service when they need it.
For example, properly utilizing data and analytics can vastly help a financial institution’s marketing department:
- Come up with more advanced customer segmentation capabilities
- Provide next-best offers and/or products that customers truly care about based on predictive analytics
- Optimize marketing campaign execution
- Increase the level of digital engagement with their customers
- Provide a true measure of ROI for marketing
The chance to gain an edge in a highly commoditized industry like banking are rare, but data and analytics provides one such opportunity to gain a competitive edge.
To learn more about leveraging big data and data analytics to optimize the customer experience, download the “Banking, Marketing and Big Data” white paper now.
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