While the banking industry has bounced back on paper from the financial meltdown that began in 2008 – posting a 70% increase in net income since 2009 – much of the industry’s rebound has come from slashing costs and writing off bad debt.
But now banks are perched on the precipice of another crisis because they haven’t been able to grow their top lines and they face aggressive competition for boosting the sales of products and services, according to a new report from KPMG.
In the post-crisis environment, banks must systematically change themselves to meet new customer demands, relying on analytics and predictive modeling to effectively exploit new data streams, the report notes.
“IT must enable efforts to connect with customers, both retail and commercial,” according to the report. “Banks that are able to find the right information from the oceans of data available to them, that leverage the required hardware and software to deliver the right products and services without breaking their budgets, and that put in place the right people and processes to construct their control environment, will realize the most value from their IT systems.”
Retail banks must focus on using customer intelligence derived from analytics to bolster revenue. Moreover, they should train their sights on discovering relationships and correlations in large amounts of data, “moving from the ‘how’ and ‘why’ to the ‘what.'”
KPMG suggests that banks:
- Gain executive buy-in, advocating the benefits of big data and also allocating the necessary resources
- Focus on business outcomes; identify information needed to meet goals
- Improve data quality
- Link data across business lines to get a single view of the customer
- Make revenue-oriented analytics part of the culture; measure and compensate employees on how well they use data to make decisions
The bank aims to analyze customer interactions across online – with 60 million online actions with customers per month in 2013 – and offline touch points, notes Westpac head of CRM and digital, Karen Ganschow.
“Data helps us form a picture of the customer’s life journey and the next step they will take,” she says.
- We invite you to watch our complimentary, on-demand webcast, “Retail Banking & Insurance: Customer Data Analysis.” In this webcast you will learn how leading financial institutions are using customer data to drive superior decisions, improve the customer experience and make the most of their marketing budgets.
- Subscribe to our blog to stay up to date on the latest insights and trends in big data and big data analytics.