Three tips for using Big Data to understand customer behaviour and decision processes
As technology drives innovation within banks and credit unions, broader access to information has evolved the way customers communicate, research and make investment decisions.
Creating targeted experiences
Relationship management has shifted between an individual and their advisor. It is now spread across digital and analog resources and relies often on peer-to-peer recommendations and online reviews.
Recent research shows that this goes further than personal decisions, with 85% of Millennials using social media to research products and services for their companies, according to Sacunas.
Impacts for banks and credit unions
The opportunity is to consolidate and harness the data collected from these different interactions into useful overall customers insights based on data analytics.
Here are three tips to consider when using Big Data to understand customer behaviour and decision processes:
1. Invest in developing personalized services. The data is available and customers are willing to provide it to get relevant products and services.
Understanding customer behaviour and decision processes through data is key to providing customer experiences Creating a personalized experience and anticipatory product and service needs is quickly becoming the norm.
The good news is that the data is accessible. According to the State of the Connected Customer report by Salesforce Research, 61% of Millennials are happy to share personal data if it leads to more personalized experiences, while 58% will share personal data to power product recommendations that match their needs.
However, the bar set for expectations is rising fast. By 2020, 75% of buyers expect companies to anticipate their needs and make relevant suggestions before they initiate contact, while 73% expect that products they purchase will self-diagnose issues and automatically right-size or service.
2. Invest in developing internal capabilities and freeing capacity to focus on innovation.
Big Data in banking offers insights can be applied to security, customer loyalty and improving decision-making processes for lending. Carrie McIlveen, U.S. Marketing Director at Metia shares: “With the rapid growth in mobile use and the accessibility of social media through smartphones, it’s critical banks continue to transform by using data and insights to connect with their clients. Across the world, financial institutions are investing heavily in mobile-friendly apps that make it easy for clients to conduct banking transactions while on the go. The result is rewarding – adds a deeper, value-added service for bank clients and provides a competitive edge for banks.”
To effectively use this data it’s important that financial institutions build capacity and expertise , as highlighted by Seerene CEO Oliver Muhr: “A top trend in Big Data technologies in the banking industry will be to better read and understand Big Data. They need to optimize the maintenance of legacy applications and use the freed up capacity for new, innovative stuff.”
3. Use data insights to drive transparency and knowledge to your customers to drive behaviour.
The impact is not only for banks, but for individual investors. Using the same data insights, customers are changing behaviour based on the choices and spending behaviour. Not even a year into its release, the TD MySpend app was adopted and used by 6% of TD Canada’s mobile banking customers, and, unexpectedly in this period, those users were on average spending 4 – 8% less. A year after launch they hit 1,000,000 users and have resonated with the key millennial demographic, with 25% of active app users are between the ages of 18 and 25 years old and 33% are between 25 and 35.
The power of Big Data comes not from the data or even the insights themselves. The power comes from the process of transforming that data to insights, and then the application of those insights in your strategic planning and individual customer interactions. “Knowledge is not power. Applying that knowledge is power. Understanding why and when to apply that knowledge is wisdom”, Takeda Shingen. What do you think? Share your thoughts by getting in touch at firstname.lastname@example.org.