Recent research shows APAC banking customers are now demanding tailored products, showing high willingness to share their personal data to gain access to personalized offerings. Meanwhile 80% say their confidence in using mobile and digital banking services has grown over the last two years.
But are banks across APAC ready to engage with the next generation of digitally-savvy customers?
Breaking down the data silos
Financial institutions were built with many data silos for good reason. Banks hold their customers’ most private personal information — not to mention their money. These walls between traditional lines of business bolster security, but they also make it difficult for banks to create personalized experiences that attract customers at scale.
Customer are left to wonder:
- Why am I being sent marketing messages to download an application I already access on a daily basis?
- Why can’t my customer service representative find relevant account information?
In most cases, banks are relying on antiquated tools to facilitate their customer interactions. As such, banking is one of the industries that could most benefit from customer data platforms (CDP) that deliver a unified customer view and data foundation.
However, having been burned in the past by ill-fitting technology upgrades, bank executives are understandably hesitant to make the kinds of sweeping changes needed to bring their customer experiences into the 21st century.
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The challenge of building unified customer profiles
When banks begin creating customer experiences on the foundation of misleading customer profiles, which was the result of poor data architecture they begin churning through inefficient marketing cycles and wasteful spending. This cycle begins by investing valuable time and resources into underdeveloped marketing and analytics data practices to fuel a CDP; the CDP then becomes built on inaccurate data, resulting in ineffective performance and inadequate campaign results, frustrated costumes, and unhappy employees.
No matter the scale — from boutique businesses to large, well-known brands — the key to success is customer loyalty, which (for the most part) can only be fostered through positive experiences. Customers expect banks to tailor their interactions. With rich, well-informed customer profiles, banks can identify and predict trends in customer behavior and create personalized experiences.
Historically, banks have taken a product-centric approach to customer loyalty — pushing credit cards or specific types of accounts. To build value, firms need to move toward customer-centricity and concentrate on building brand value, which means taking a holistic view of the customer’s engagement with the brand and focusing on customers’ individual needs and retaining them with personalized experiences. This extra effort will result in happier customers, skyrocketing loyalty, higher engagement, and a more substantial return on investment.
Rethinking data architecture
Removing silos and bringing down the walls between banks’ traditional lines of business will be critical to improving the customer experience. When banks rely on the architectures and approaches that they used before the digital revolution, they are then limited in their ability to fully leverage customer data.
CDPs are designed to simplify the process of ingesting data, identifying customers, and analyzing that information intelligently. That’s difficult to build on top of fragmented, legacy core banking platforms. A CDP can only provide a complete picture of each customer if it can collect data from disparate systems throughout the organization.
In order to construct these systems efficiently and quickly, banks need to balance the risk of involving a third party to enhance and drive the customer experience.
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Cloud-based tools offer a secure, efficient way to extract legacy data from core systems and analyze where it can be used effectively. These types of tools are also more cost-effective since they offer the ability to quickly achieve ROI with no need to modify or replace legacy core technology. By incorporating strict regulatory compliance and information security protocols from the beginning, these tools offer banks the best solution to bridging siloed customer data from multiple departments.
The future of banking is customer-centric
The personal banking landscape is shifting and digitizing at a pace that is unlikely to slow down. This shift was greatly accelerated by the pandemic, which limited access to physical locations and drove many banks to create new digital touchpoints.
Financial institutions inherently move too slowly and are starting to fall dangerously behind. As a new era of disruptive financial technology emerges, banks will be better positioned if they look at where customer expectations are headed and attempt to meet them instead of simply doing more of the same. The faster these organizations integrate their customer data and put it to use, the more they can satisfy the needs of their customer base, build stronger brand loyalty and separate themselves from the competition.
Consumer expectations have now evolved, and banks and credit unions must develop evidence-based, future-ready cross-channel and cross-platform customer experiences that their clients prefer. With the right customer data tools, banks can make sense of scattered data and turn it into valuable insights to engage customers and grow value.
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