Banking Analytics Tailored to Your Business

banking analyticsIt’s no longer a secret that personalization is key to improving your customers’ experience. Whether it’s supporting existing clients, cross-selling and upselling to them or sourcing new ones, the more you know about them the better you’re able to reach them. In the financial industry, however, much of the available data comes in sets accessed via analytical tools that operate in silos.

Here’s how to find a tailored system that helps you get the most out of your analytics by giving you the specific information you need, when you need it.

Be Flexible

Analytics products aren’t all created equal, and most core system vendors offer fixed solutions that consist of the analytics they believe will be most useful to your financial institution. In many instances they are correct, but for institutions offering a range of products with unique attributes like yours, fixed solutions often miss the mark on the data you need. Look for a flexible solution such as JOHO OneSource™, which pulls data from across departments to build a customer profile focused on the questions you need to have answered at the time.

Skip the Silos

Financial and purchase data is typically stored in silos, which means the average analytics deliver information based on those same silos. To get banking analytics tailored to your business’s primary activities, you need to sidestep the silo trap. Avoid buying core and ancillary system tools with a single analytics focus, which could eventually result in your needing five different analytics tools to cover various focus areas. Implement a tool with a single-source analytics platform that draws data from multiple sources, combines it, and produces intelligence that’s usable and interpretable for your specific purposes.

Minimize and Simplify

To remain competitive, modern financial institutions need business information for marketing, reporting and regulatory purposes. Just as having a lot of data can become overwhelming and render the intelligence useless, having too many analytics tools can end with reverting to manual processes (such as Excel) to check for delinquencies and other issues.

You can overcome the conundrum of “too much useless information” by installing a simple, cross-system platform that functions as a data warehouse. This type of system incorporates information from multiple sources, performs complex queries, and delivers reports based on a single source of truth. It also eliminates the need to have several specialists who each pull data from a particular tool, simplifies deployment, and reduces the training requirements for users across the institution.

Take a Consultative Approach

Instead of settling for a standard analytics package that provides information the vendor thinks you need, look for a system based on a consultative approach. Find an expert in enterprise systems who listens to your pain points, helps you to ask the right questions and find the right answers.

At JOHO, we take the time to get to know your business needs and goals, develop a solution to meet them, and help you assess whether you’re ready to implement it.

 

Setting Up Your Analytics Goals for Success

analytics goalsIn these days of the big data revolution, multiple ways exist in which financial institutions can use analytics to support strategy and drive its execution. Statistics show approximately 90% of senior bank executives believe in the power of big data, and its potential impact on growth and profitability over the next five years. To achieve this, however, institutions need to develop a clear understanding of how to use advanced analytics tools to align with client interactions, anticipate needs, and make decision processes simpler.

Getting the Most Out of Your Analytics

Retail financial institutions typically have narrow margins, which forces them to run lean, efficient operations. Analytics can help them to understand issues such as:

  • Most profitable customer segments, with identifying characteristics
  • Their geographic locations
  • Percentage of market share occupied by them
  • Most frequent needs and wants
  • Communication channels most often accessed
  • Most effective marketing actions
  • Average lifetime value

The availability of rich, real-time data in the form of numbers, text, voice and images now exists for practically every customer interaction, every product and service financial institutions offer, and the processes they use to deliver them, according to McKinsey & Company.

Making Your Analytics Work for You

Set your financial institution up for success by using advanced analytics to identify the real challenges facing the company. Perhaps you have a large market share, but lag behind competitors in products per customer? Find out who your clients are, what products they hold, examine their credit card statements, transactions and point-of-sale data. Review their online and mobile transfers and payments, and map this against their credit scores. By doing so, it’s possible to determine key characteristics that define microsegments in your customer base.

Ensure the data you collect is high-quality information, and the input is done correctly. Use a specialized data model and reporting solution like JOHO OneSource™ to analyze your intel and “connect the dots.” This will enable you to identify insights from different data sets and build a complete picture.

Use the data to inform your product development. For example, knowing what the next product a microsegment is likely to buy enables you to produce a targeted product with a higher chance of success.

Putting Theory into Practice

Some ways financial institutions are making analytics work for them could give you inspiration for using them in your own operations. For example:

A bank in Europe was experiencing significant customer churn, and implemented various retention techniques aimed at making inactive customers active again. By using machine learning algorithms based on big data to predict which active clients were more likely to reduce their interactions with the bank, it became possible to target them with a campaign at an earlier stage before they became inactive. The level of churn was reduced by 15% as a result.

A U.S.-based institution reviewed the discounts private bankers were giving clients and found patterns of unnecessary concessions. By implementing a number of policy changes the bank’s revenue increased by 8% in a few months.

These are completely opposite examples, with one being a cost saving and the other a revenue-generating action, but both would be impossible without insights delivered by analytics data.

Don’t let your institution lose out on the benefits offered by advanced analytics. Contact JOHO today to schedule a consultation and discover what we can do for you.