The right approach to data that eliminates silos, delivers personalized experiences and drives efficiencies helps today’s institutions stay competitive.
According to BAI’s 2023 Top Banking Trends and Challenges report, new client acquisition has been the leading business challenge for financial organizations this year. The same report reveals that two-thirds of financial services leaders are experiencing an increase in consumer deposit competition. This environment signifies the vital need for financial services leaders who want to differentiate their organization to institute creative growth strategies. But how?
Eliminating data silos
A recent report from WBR Insights discovered that 54% of financial institution (FI) leaders acknowledge data silos as a significant barrier to innovation and maintaining a competitive market advantage. These silos limit an FI’s ability to extract data across the enterprise, which hinders long-term strategy development and growth.
Silos can be mitigated through data unification or leveraging technology to centralize customer data within the FI, creating a holistic view and understanding of each customer. Both financial services leaders and customers will be satisfied with a simpler banking experience. This is especially beneficial during more complex product originations, such as commercial lending, by eliminating the need to access data already stored within the FI. Likewise, this consolidated data can uniquely deliver insights to put toward tailored product and service recommendations, enriching the banking experience without the need for added staff resources or time.
A recent report from McKinsey indicates that organizations that fully harness the power of their data are 23 times more likely to acquire new customers, a testament to personalized and data-informed services.
Fostering hyper-personalized experiences
A unified data framework equips FI leaders with invaluable customer insights. Often, leaders find themselves at the mercy of siloed data, which fails to present the customer’s full relationship with the FI. This lack of information then prevents the leader from recommending the most effective financial strategy, leaving the customer frustrated because of an issue that is easily eliminated.
Today’s technology can centralize a customer’s data regardless of their banking relationship with the FI and present holistic insights in near real time. This enables the leader to listen and engage with the customer uninterrupted, creating an environment ripe for building deep trust and loyalty with customers.
Increasing the bottom line
Recent research by Deloitte underscores the adverse consequences when FIs fail to harness data for personalization initiatives. This inability impacts the customer experience and can result in heightened costs, diminished business agility and revenue loss. Conversely, centralized data provides financial services teams with enhanced visibility into potential business opportunities and performance metrics, enabling leadership to make informed decisions and pinpoint areas for operational and customer service enhancements.
Removing data silos transforms an FI into a fully collaborative space that enables each leader, regardless of their division, to serve their customers more efficiently. Connected data ensures that each team member across the enterprise possesses role-specific capabilities to access relevant, up-to-date information, resulting in more efficient workflows and time savings. Banks leveraging consolidated data empower their teams to easily determine the status of any client interaction, as well as the issues and opportunities requiring immediate attention, thereby facilitating frictionless customer experiences.
This heightened efficiency bodes well for the FI’s reputation. In a competitive industry, the ability to respond quickly and effectively to market shifts is essential. Standing apart from competitors with better products, services and personal touches is guaranteed to cultivate greater customer loyalty. Data insights serve as powerful tools for aiding product teams in understanding which products have the most significant impact on the customer journey, understanding where customers encounter problems and identifying fruitful opportunities for expanding product offerings.
Adopting this tailored approach to product delivery and client relationship management, facilitated by unified data, ultimately empowers financial service leaders to strategically determine how their teams can provide consistent quality, reduce pain points and deliver exceptional customer experiences and outcomes.
According to McKinsey, 71% of consumers expect personable interactions from companies, and those that excel at delivering this often experience accelerated revenue growth. Unifying data allows powerful customer stories to emerge, empowering bankers to pinpoint opportunities to nurture and extend their institution’s customer relationships. With customer information consolidated, organized and accessible in one place, it becomes easier for financial services leaders to create intelligent insights, identify risks and opportunities and make timely, tailored customer recommendations. These recommendations then lead to expanded account holder relationships and stronger deposit retention and attraction.
David Benskin is the founder and CEO of Wealth Access, a Nashville-based financial technology company launched in 2011.