Banks around the world are under enormous pressure as regulatory reforms and sluggish growth are cutting into profit margins. According to McKinsey & Company’s Global Banking Annual Review 2015 report, global profit margins for banks fell by 185 basis points in 2014 as global interest rates have remained low and competition continues to intensify.
Banking customers have become accustomed to fast, convenient, and digitally enabled banking. For instance, the number of global mobile phone users with bank accounts who accessed mobile banking services has risen from 22% in 2011 to 39% in 2014, according to a March 2015 study conducted by the U.S. Federal Reserve System.
As banking customers continue to shift their behaviors towards faster, more agile digital banking services, retail bankers are assessing how they deliver tailored customer experiences that strengthen their relationships with existing customers and attract high-value prospects.
There are a number of ways that bankers can use Fast Data to deliver the types of experiences that customers want and expect. For instance, a bank associate who’s speaking with a high-value customer can use Fast Data to analyze a full range of information about the customer, including all of the products previously purchased by that customer, the customer’s current lifecycle status (e.g. high-income empty nester), as well as an analytical evaluation of keyword sentiments shared by the customer during the interaction.
The combination of these insights can be used to provide a proactive and relevant product offer based on the customer’s current needs and interests (i.e. a Roth IRA).
Fast Data can also enable retail banks to create new services for key customer segments. For instance, some banks have begun offering “quick cash” loans to qualified customers, including Millenials who might not otherwise qualify for traditional bank loans. The use of Fast Data could enable a retail bank to quickly pull together the data needed to run a credit check on a loan applicant and calculate the risk profile of the potential borrower in a matter of seconds.
Bank customers also want to receive services faster with less intervention. Fast Data can be used to power mobile banking apps that provide a Siri-like virtual mobile assistant to allow customers to use voice commands to navigate and complete a variety of banking transactions from their smartphones. Providing banking customers with these types of capabilities can make it easier for them to do business with the bank while differentiating the bank’s customer experience.