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How to use Big Data analytics for Financial Service Endeavors!

Leveraging Financial Service with Big data Analytics

A few months back I was working on a paper on Customer Relationship Management; a really nice video captured my eyes, it depicted how a customer’s journey evolved from an early stage to growth and then matured and how companies must ensure continuous evolution of their product and services through disruptive innovation in order to serve the needs of the millennial and survive the new race to Gain the Competitive Edge over their competitors!

I thought, how are they gonna do it? What will be the mechanism? Then I got the answer!!!! Its Big Data!!!! Big Data has been the talk of the town; a much talked about topic on Social Media, LinkedIn etc. In this post, I’ll briefly discus a few tips to leverage Financial Service endeavors with Big Data Analytics! First of all, let’s define Big Data. As per Wiki:

Big data is the term that often refers simply to the use of predictive analytics or other certain advanced methods to extract value from a large set of data, and seldom to a particular size of data set. Accuracy in big data may lead to more confident decision-making. And better decisions can mean greater operational efficiency, cost reduction, and reduced risk.

Now let’s discuss how we can use Big Data in Financial Service endeavors.

Big Data and Customer Experience

This has always been my favorite. Banks have always benefitted from customer information based on account activity and segmentation. With the advent of big data technologies, they can understand their customers in greater depth and predict their needs by analyzing all available customer information. In this Era of service excellence, tech-savvy customers want more! The Millennials are just not interested to visit the boring bank branches, stand in the queues, and wait for service. They’d rather just dial a USSD code or visit an App or website to fulfill all their Financial Services need. As a Bank, you need to analyze the customer data, their age, their preference related to the placement of your service.

Customer preferences for interacting through multiple channels and using mobile devices; are driving banks to adopt a mobile digital customer experience strategy that makes the most of big data. Mobile devices, including tablets and smartphones, are overtaking branch touchpoints, a trend that shows no sign of stopping. Mobile interaction represents an opportunity for banks to provide their customers with the ultimate multichannel/ omnichannel experience of doing business anywhere, anytime using ubiquitous cellular technology.

To foster lasting connections with customers, banks need to expand capabilities to capture and manage data across all touchpoints and implement the most appropriate marketing, social business and mobile technologies. Now if we take the example of Bangladesh, our banks are far behind this strategy! They are just focusing on providing basic services such as SMS Banking or Banking through Apps when they can do even more!

Big Data and Customer Relationship Management:

When you are a Bank, you are indeed sitting on a gold mine of data. You know every single detail of your customers. Where they eat, how much they spend, what they buy, when is their birthday, how much is the EMI of their cars, apartments, etc. Now what to do with all these data? Let’s discuss.

A few days back, I saw an excellent advert on TV. It was an advert for a Bank located in the USA. They were giving away awesome gifts to their customers while they were using the ATMs. Gifts like a free tickets to visit home, or Gifts for Grandparents for their grandchildren. All these were possible just because of Big Data.

Now let’s discuss another simple example. Mr. Akram who’s been banking with bank A recently bought an apartment. He just took a personal loan for marriage. (The typical south Asian weddings are hella expensive!!!). Right after his marriage, he hit a jackpot. Got a job that pays double. Hence he started to make more money than before. Now the bank has all this data!!! What can they do??? Well, they can offer him a home loan based on his excellent track record with them. They can offer him Car Loans etc. These are just basic examples! I am sure our Bankers are already doing these.

Now let’s give a little more!!!! As a banker, you need to analyze your customer’s daily usage!!! Their Financial Needs!!! Where they buy, what they buy, where they eat etc. Offer your customer customized value propositions just for them. Crowdsource your value proposition for your customers, let them chose their benefits, Use your existing data for CRM!!! That’s the key! Finally, in this Era of digital customers and service excellence, we are already seeing that the banks are slowly changing: becoming increasingly innovative in what products and services they offer. We see banks innovating with enhanced banking, namely, providing access to new services not offered to their customers in the traditional channels; and financial products such as insurance, credits, etc. These are natural extensions of today’s banking experience. In addition, we are also seeing that some banks are leveraging CRM systems and Big Data big time, enhancing customer experience, ensuring that they are catering to the customer’s needs; be it special discount coupons, special interest rates, special day surprises, etc.

This ends the first part of the series on Big Data and Financial Services. Stay Tuned for Part 2. I’ll be discussing how to leverage Mobile Financial Services with Big data Analytics!