This post is guest authored by Nick Castellina, Research Director at Aberdeen Group.
Financial services companies are not the most popular kids in class these days. That doesn't mean, however, that they can't maintain happy, loyal customers by leveraging mobility. For example, Aberdeen's Analytics in Financial Services survey focused a specific set of questions on respondents from the banking sector to see how these organizations address the pressures of the industry with analytics delivered to users anywhere. The top pressure reported by these banks was the need to gather customer insight (cited by 57% of respondents), so Aberdeen examined the benefits of mobile engagement of customer data.
As customers interact with banks across multiple channels and products, they leave a data footprint that, if leveraged properly, can provide valuable insight. By applying analytics to customer data, decision makers can segment and profile customers to drive improvement across key customer metrics (Figure 1). Over a twelve month period, banks using analytics to segment and profile customers saw a 7% increase in market share, compared to just a 3% increase for those banks not applying their BI tools to customer analysis. Customer analytics empower banks to anticipate customer needs at the point of interaction. When striving to gain market share, banks must distinguish themselves by the quality of their service. Mobile enablement drives improved customer relations that will attract customers away from competitors and encourage prospective customers to enter the market.
Source: Aberdeen Group, June 2013
Segmenting and profiling customers also tells banks which customers are most profitable or are ripe for fresh sales initiatives. Banks with customer analytics reported a 7% improvement in cross-sell and up-sell revenue, a 133% greater improvement over banks without customer analytics. Customer data, both structured and unstructured, helps sales representatives target the right customers with optimal products and offers at exactly the right time. Converting raw data into timely customer insight develops greater understanding that will uncover hidden sales opportunities and increase wallet share. Mobile enablement presents this information wherever customer interactions take place so users can capitalize on every opportune moment.
Similarly, users can remotely obtain customer insights to drive customer satisfaction and loyalty. Banks with customer analytics improved customer attrition by 7%, whereas those without saw attrition worsen by 5%. Mobile customer data analysis enables personalized service interactions, so banks can optimally cater to individual needs and excel in the areas that matter most to each customer. Analytics help banks flag indicators of discontent and other early warning signs of customer departure. With this knowledge, customer-facing employees can be proactive about attrition rather than reactive. Banks can nip customer issues in the bud instead of recognizing problems only after picking up the pieces of lost business. Decision makers can also recognize attrition in specific customer segments and develop targeted solutions.
A fool and his money are soon parted. For banks, their customers are their money. Labeling banks that fail to deliver mobile customer insights to users as utter fools may be a tad harsh, but then so is the sting of losing customers and revenue to the competition.