How banks can use big data to gain customer confidence

By Harry Allan

The financial services industry faces a number of important challenges; including preventing security breaches, maintaining customer service in an era where branches are closing, catching fraudulent activity and more.

At the same time there has been a rise in non-traditional banking and lending products creating disruption in the industry. To maintain their relevance and compete effectively, banks need to win back customer confidence, according to Teradata.

Alec Gardner, GM, Advanced Analytics ANZ, Teradata, said, “To win back customer confidence and maintain their place in the face of revolutionary digital disruption, the banking industry needs to review its traditional business models and operational practices.

“Some banks have already embarked on their digital transformation journey, adopting new technologies and tapping existing data resources to develop better products and services. Big data and analytics are the key to this but their full potential still remains unrealised.”

Banks need to start turning consumer-perception obstacles into data-driven business opportunities. For example, by analysing customer payments data, banks can get a good picture of a customer’s spending trends and identify when a customer may require certain financial services, and then be proactive in offering these services as a value-add.

Alec Gardner said, “While banks are already adept at spotting fraudulent activity and mitigating fraud, there is still much room for improvement when it comes to analysis of activity to detect high-risk spending patterns. Text analytics and web behaviour analysis can be enhanced to detect suspicious activity and insulate customers form a lot of pain and hassle.

“The service experience can also be improved using big data analytics. Customer activity data can be used to pinpoint processes that are problematic for customers, so that they can be remedied. Banks can also enrich the functionality of their mobile apps so that rather than just being used by customers to check their balance and pay bills, they can offer budgeting advice and templates, analyse their spending habits and offer recommendations, as well as suggest easier ways to manage their funds and regular payments.

“By using analytics to drive a more customised, personalised experience, banks can overcome the disruption in their industry, retaining and attracting more customers.”

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