In retail banking, better customer service presents a strategic opportunity to improve the bottom line, but it requires more than providing longer hours, prizes, and incentives, according to business intelligence and performance management firm Cognos.
According to McKinsey, retail banks must invest in every aspect of the consumer experience and offer relevant products. And this means, says Laurence Trigwell, director of financial services solutions for Cognos, there is a strong need for banks to adopt business intelligence as a critical element in their growth and profitability strategies.
Branch level
Despite heavy investments in ATMs, telephone and internet banking, research by Booz Allen Hamilton shows that 90% of customer relationships are still won or lost at the branch level. For branches to drive growth, they must deliver what customers want: choice, convenience and customisation.
CRM, ERP, and other transaction systems present a wealth of customer data - buying patterns, purchase history, satisfaction levels, demographics, and other information. But according to Trigwell, this information often resides in silos which prevent banks from using it to inform decisions about new products and services. So, he says, many banks are turning to business intelligence to determine the mix of products and services that their customers need.
Matching up
Trigwell says that banks can create detailed customer profiles that help them identify who is most likely to buy which products and why. They can then examine the data from different perspectives to offer customised packages and services targeted to different customers - whether it's an education loan for a 20-year-old student, or a mortgage and investment plan for a 40-year-old high income earner. And instead of seeing so many meaningless products, customers perceive the services as being relevant to them.
Long term value
Identifying profitable new customers is essential. But existing clients, too, offer long-term value, said Trigwell. Analysis, a core business intelligence capability, can uncover the most profitable customers or an individual's history with the institution, including purchases and changes in buying patterns.
"With this information, staff can respond accordingly: by waiving a customer fee or cross-selling products," he says. "Across branches, banks can identify where sales are highest and where they are flat. This may engender additional product offerings, services, or marketing campaigns."
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