Transaction data: a strategy to reconnect with the customer

By Andrew Ah Toy

If you’ve ever sat around a dinner table when people start talking about their bank, you’ll know that  someone will inevitably express nostalgia for the days when banks knew and treated their customers as individuals. Particularly in our regional areas, like the rural Northern Territory where I grew up, local bank managers were part of the community, who knew each of their customers and sponsored the sausage sizzle at local sporting events. More importantly, they understood intimately the ability of a borrower to service a loan.

Many banks built their reputations and their businesses on these kinds of human insights, but unfortunately, they are notoriously difficult to scale and, in most cases, haven’t lasted through a period of prolonged consolidation and necessary efficiency gains in the industry. However, the advent of advanced analytics now offers banks the opportunity to re-establish highly personalised relationships with their customers at scale.

To establish personalisation today, an effective data strategy is required and relies on a data ecosystem that is consistent, accurate and meaningful. We work with a number of banks, using our Q.Refinery product to cleanse and refine their data. This gives banks the power to unlock new intelligence at speed, and from there, possibilities arise in any number of areas. Recent projects we’ve worked on with banks have dealt with issues such as personalised product offerings, risk modelling and fraud detection, to name a few.

As we’ve partnered with various banks, we’ve gained an appreciation of the organisational factors that are most likely to mean success for a banks data strategy. From our experience partnering with banks in Australia and around the world, here are our tips to make the most of your data journey:

1. Start at the top: The first step for any bank is to ensure that the business is truly aligned to the importance of harnessing data to deliver better customer outcomes. This is the CEO’s mantle. Establish a world where your data is in sync and you have a set of consistent features that describe each customer, which every business unit looks at as a single source of truth. Then you can work out what products each customer needs, how to make your customers aware of these products, protect against risk and measure against metrics that ladder up to the CEO.
2. Make sure incentives support your strategy: Most of the projects we work on deliver an attractive and immediate pay-back. But some opportunities will challenge your incentive frameworks. People are naturally biased and prone to replicate what’s worked in the past. If you want to achieve genuine change, your leaders must be open to new perspectives and your incentive regime must genuinely reflect your data strategy.
3. Align your team behind the data vision: Your C-suite will need to champion your data vision. This is where you need to communicate a compelling picture of what a data-led future looks like for you and the opportunities it will present to all areas of the bank.
4. Get the right people involved: When you’re doing something new, you take advice. You employ an architect to design a factory. So why, when implementing a data strategy, do so many businesses go it alone? You’ll need to hire some data-natives to disrupt the way you think and help frame a vision of what’s possible. And you’ll need to be realistic about your capacity. At Quantium, our best data scientists break new ground daily. We are recognised as a data employer of choice. We have worked with some of the biggest banks around the globe and have a clear understanding of what refined data can deliver across many facets of a bank’s operations. Most importantly, we know how to do this with stringent data privacy and protection measures.
5. Never lose sight of the customer: We believe that data is at the heart of a customer centric business because it is the footprint of human behaviour. It is the perfect value chain: automatically predictive and responsive to the needs of the people it serves. Our solutions treat every customer as unique and ensure that everything you do is geared to delivering a personalised, and at its best delightful, experience.

For the successful banks of the future, the implementation of such a strategy will be pervasive and seamlessly integrated throughout every part of the value chain; delivering superior customer service, more personalised products, sustainability and reducing risk.

We are already witnessing big tech firms with a highly engaged consumer base and strong focus on individual customer experience enter the banking space – like Apple leading the way with the launch of the Apple Card. Other entrants like buy-now-pay-later providers compete on their perceived cost appeal. But banks have a huge competitive advantage in that they already have the customers, with all the necessary information on hand to compete on both price points and preferences, providing they can deploy the institutional resolve and the expertise to take advantage of it.

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Quantium is a world leader in data science and artificial intelligence. Established in Australia in 2002 and now employing over 750 people, Quantium works with iconic brands in over 20 countries, partnering on their greatest challenges and unlocking transformational opportunities.