The Financial Brand Insights - Summer 2022

How Banks Can Capitalize on Their Data to Stay Competitive

Some retail stores such as Walgreens now offer banking services, and fintech apps like Acorns have launched competing products that are drawing consumers away from traditional financial institutions. By better understanding account holder behavior, banks and credit unions can differentiate themselves in the market and identify these challenges to get out ahead, with targeted offers and helpful resources that strengthen account holder loyalty. Achieving actionable data doesn’t have to be cumbersome — getting on board with organization, security and automation can give a bank or credit union the edge it needs over the competition. The following five tactical milestones are a good guide for developing a strategy featuring activated data: 1. Cleanse transaction data Consumer Magnets: Non-traditional institutions and online lenders have become a popular option for consumer loans, providing convenience and time savings.

By Segmint

Accessing actionable insights from core data has long been a problem for banks and credit unions of all sizes. Cumbersome core systems make it time-consuming for many internal teams to extract meaningful data. Even when leaders manage to mine real insights, the data is often static or the information gets siloed within individual teams, limiting its value. New competition from fintech and other industry challenges are threatening wallet share and account holder retention. It’s critical that financial institutions use their account holder transaction data to create actionable insights. These insights will help anchor relationships and enable banks and credit unions to stay top-of- mind and top-of-wallet. The Competitive Challenges Facing Banks Financial institutions are faced with a new urgency in today’s climate, not only to know and understand their account holders’ financial needs, but also understand how they want to engage. The boom in online banking adoption accelerated by the pandemic means fewer account holders visiting brick-and-mortar branches. This eliminated one of the primary account holder engagement channels for many financial institutions. At the same time, the banking industry as a whole has become fragmented because consumers have more choices than ever. Globally, 64% of consumers have used one or more fintech platforms, according to Ernst & Young. With the trial and experimentation of other institutions by consumers, attrition rates in banks and credit unions need to be watched closely. Overall attrition rates in the banking industry are around 15%, according to FI Works, and attrition can be up to 200% higher in an account holder’s first three to six months with an institution.

2. Process data securely 3. Share data securely 4. Execute multichannel campaigns 5. Adopt agility

1. Cleanse Transaction Data Analyzing an account holder’s data can help reveal their priorities and offer insights on future actions. Financial institutions sit on a mountain of merchant payment data, all full of insights and spending behavior patterns. The problem is that unstructured, uncategorized transaction data often looks like a jumble of random numbers and letters because the data gets truncated and changed as it moves throughout the financial ecosystem. Actionability starts with making sense of that data.





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