Compared to several other industries, the banking industry has always been in possession of a considerable amount of customer information. Initially, this data was used for bank account security reasons. But over time, customer information has proven to be highly essential for companies looking to stay competitive in the financial market. The adoption of advanced technologies like big data that can store a significant amount of user data has proven to be highly beneficial for companies in the financial market to maintain and access customer information conveniently. Companies can use customer data to derive important analytics of consumer behavior and use them to formulate policies. However, according to research by Boston Consulting Group, many financial market players are far from fully utilizing big data to its full potential. Some of the main reasons they fall short are:
- Due to multilayered systems and the vast amount of data, banks do not use the entire length and breadth of data at their disposal.
- Lack of coordinated vision, which results in inappropriate allocation of human and technical resources
- Banks often have to deal with competing priorities such as addressing regulatory changes in the wake of the financial crisis
With the rising customer expectation, financial market players need to be on their toes to meet the customer’s demands. Here are a few strategies that companies in the financial market can leverage to become market leaders :
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Partnerships Between Banking and Fintech Firms
Over the past few years, several fintech firms have been established in the market. These companies use contextual insights to provide customers with an improved digital experience and simplified delivery of financial services. The contextual insights have helped several fintech firms to build solutions that are far more superior than big banking companies. Wonder how a partnership between these legacy banking companies and fintech firms help? Fintech firms lack a strong customer base unlike that of big financial market players like legacy banks or financial firms, but these banks have been exposed to more advanced technologies. By combing the large customer base of legacy financial firms and the advanced technology of fintech companies, a win-win situation can be attained.
Eliminating Friction from Customer Journey
With the increasing exposure to digital mediums, it becomes pointless for companies in the financial market to wait for customers to walk into their branches. Now, financial products can be easily bought online, without even having to wait in long queues at the banks. Going digital has become the key to eliminating the barriers to communication with the customers and transforming the customer experience. To efficiently eliminate friction or trouble in the customer’s experience, financial companies must leverage useful insights from the user data available. Such data will help them to get a better idea of factors other than demographics such as geolocation information, channel preferences, and life-stage insights.
Formulating Actionable Data
The customer’s expectation from the financial market players is rising. Therefore, it is no longer sufficient for banks to have access to customer data and the ability to process insights. Customers of today expect financial institutions to provide them with real-time recommendations based on the changes in their financial profile. This includes advice on the ability to save more money, offer more financial knowledge, help them achieve specific financial goals, and also assist in better budget spending, etc. Therefore, banks have to realize that it is not just about collecting customer information anymore, it is all about using these customer data to improve their experience.
Incorporate Advanced Technology
Several advanced technologies such as the Internet of Things and artificial intelligence are making use of big data analytics to solve problems and improve efficiency. Financial market organizations can use these advanced technologies to provide data or share information with their customers in real-time. These technologies can prove to be profoundly transformational in the financial industry.