Baby-boomers will soon be transferring their assets to generations X and Y, primarily defined by their exposure to technology and the web from an early age. As banks’ relationship management styles gravitate towards digital mediums, their next priority should be the associated customer data. How can banks adapt their IT infrastructures to manage the amounts of data new generations are generating?
In today’s digitalised world customer data is increasing daily. Social media alone (Twitter, Facebook, LinkedIn, etc.) produces huge amounts of information that banks are only starting to make use of.
In addition, banks’ monopoly over their customers’ finances is a thing of the past. Nowadays, clients keep current, savings and brokerage accounts with multiple providers. If a bank only owns one account with a client, information management becomes even more important.
The ultimate challenge for banks is to transform client data into tangible, customised offers. The rewards will be significant: cross-selling opportunities, product innovation, hyper-segmentation of offerings, leading to greater revenues and customer engagement.
The unfortunate truth is that banks are not yet fully equipped with tools, processes, applications and frameworks capable of managing huge amounts of data derived from multiple sources, in real time. Data from social media channels, for example, is only being used for product promotion rather than as part of banks’ holistic data governance solution, due to security, integrity and customer privacy issues.
How to get the data right?
The right vision and culture are paramount. This involves ownership of customer data projects at the Chief Data Officer level.
The next step is to align technology with this new vision. The good news is that the infrastructures necessary for the capture, storage and processing of large data volumes in real time are increasingly affordable and much simpler, thanks to vast improvements in storage technologies.
So what do banks need to do?
- Prioritise data topics in order to centralise reference data requirements into one centre of competence;
- Manage data from a holistic point of view, encompassing the relevant end-to-end data value chain;
- Monitor continuity of operations and feasibility of objectives by breaking down changes into digestible packages with clear mandates, timelines and delivery focus.
All this requires investment and resources. The increasing competition for the new generations’ wallet-share makes this investment a necessity for banks, to become data-powered businesses with products and services that belong in the digital marketplace of the future.