Delivering true personalisation in the age of big data

John Fleming, Webtrends: big data is a promise and a great opportunity for retail banks

Big data is a promise. In theory, banks can now know more about every single one of their customers than ever before. There is a real opportunity for them to cement their customer relationships; to create targeted offers and personalised experiences that attract new, and retain existing, customers.

UK’s retail banks have increasingly been using data analytics to learn about their customers’ spending and saving preferences and decision making patterns, in order to offer tailored products and make the customer relationship more personal. Big data – the sheer volume and variety of it, the speed with which it can be collected, processed and exported – has the potential to take this to the next level.

According to a report by the Centre for Economics and Business Research (Cebr) and SAS, “The value of big data and the internet of things to the UK economy”, retail banking is already one of the sectors that collects and stores the largest amounts of data, and is expected to become the leader in big data use by 2020.

But collecting and storing data is only the beginning. Data is only as useful as we make it, and big data is a journey that many organisations are only just truly embarking on. One of the hurdles is that many marketers or customer experience managers are not data analysts, and so they may struggle with how to release and action insight from data. What’s more, the vast amount of data that is available from so many different sources makes it difficult to decide what data is the right data to use.

A wealth of data sources
Banks have long had more consumer data available to them than businesses in other sectors, with the exception of the retail sector perhaps. Banking customers tend to share a huge amount of personal data with their bank. They readily supply information around mortgage applications, insurance, pensions, or savings, which can be used by the bank to focus relevant product offerings to potential clients.

There is also a wealth of insight to be derived from studying customer behaviour on websites and mobile apps. When do they go online? How do they browse? Where do they linger? What captures their attention?

In addition, many customers now liberally share their preferences and opinions on social media. According to Brandwatch and GWAVA, there are 2.3 billion active social media users, 500 million tweets a day and 4.3 Facebook likes every day. The ability to extract actionable information from these masses of unstructured data is a challenge – today, at least. However, banks cannot know today what insights they may be able to gain from this data in the future. While sceptics may argue that there is no point in storing data for which there is no specific purpose, no capacity to interrogate and no ability to keep secure, the fact that data storage is now so cheap allows banks to capture the unstructured data along with other customer insights, with a view to analysing it later on.

Making it personal
Capitalising on data analytics and contextual personalisation already gives banks the ability to reach different customers with different messages or offers; allowing them to tailor interactions based on demographics, interests, location or even savings and investment history. Emerging and challenger players – like Virgin Money, Metro and Atom – are good examples of this, with personalisation spearheading their digital offerings. However, in most cases personalisation is not quite yet taking place at a truly individual level.

Only if banks can make sense of all the data they have access to will they be in a position to offer their customers truly personal interactions, every time the customer connects with the bank – whether he is in a branch or withdrawing cash from an ATM. For example, the bank may know that the customer has searched for mortgage rates online. The next time he/she enters his debit card into an ATM, he/she could see a message alerting them to a mortgage deal, and an invitation to step into the branch to discuss his situation with an advisor.

Analysing data from disparate sources, and linking both real-time and historical insight, allows banks to connect information from all the channels that the customer uses to deal with the bank and create a cohesive experience throughout. Whether it’s building personalised offers that are truly relevant to the customer at the time, highlighting additional products that fit the customer’s lifestyle and profile, or alerting the customer to a possible payment mistake – there are many ways in which the bank can add value to the relationship with its customers.

Breaking down silos
Breaking down traditional departmental boundaries and connecting systems across the organisation is a crucial step in this. All the data collected today tends to reside in disparate systems, each serving only one specific delivery channel or product. As long as the data remains in its silo it will be extremely difficult to provide a superior and personalised banking experience, but whilst Big Data solutions can handle the volume and the speed of the data coming into an organisation, breaking down those silos is still a challenge for many banks.

It takes the collaboration of three or four distinct departments to make this happen: IT, marketing, business intelligence and customer experience. Many financial institutions have already embarked on bringing elements from each of these areas together to create a Digital Centre of Excellence (DCE), where the traditional departmental boundaries are broken down and decisions are made based on high level strategic thinking rather than the more tactical approach often taken within each department.

Growing trust
Like no other industry, retail banks have to build trust with their clientele. Customers expect a personal experience that makes them feel valued; after all, this is where their money is held. Reflecting this personal relationship back to the customer not only in the branch, but also through online and mobile interactions is a difficult task but thanks to the wealth of data available, it’s not impossible.

Customers make no difference between the various touchpoints, they expect a consistent service throughout and rightly so. Personalisation therefore needs to happen on all channels, and new technologies and applications that enable this must be taken seriously. Mobile apps are becoming more popular and connect banks directly with their always-on-the-go customers. With easy access to the bank and useful added functionality such as loan calculators, for example, they offer another area where banks can excel at delivering outstanding service, but again keeping it relevant to the customer is key.

Whether a traditional high street bank or an online-only business, all banks are now facing the same challenge of retaining customers in a changing competitive environment. There is the danger of going too far though and abusing the knowledge banks have about their customers so the key is to tread carefully – if going that step too far with personalisation, organisations risk coming across as invasive. This is true for all sectors and especially for banks. With great power comes greater responsibility.

Over time, through an open, honest dialogue that addresses each customer’s individual needs at the right time, and in the right place, banks can expect to grow their customers’ trust and loyalty.

Big data technology is the enabler. Not the amount of data as such, but the ability to interrogate it, mine it for both immediate actions and for predicting market movements or global trends. Technological advances help banks to be highly tuned in to their customers’ wants and needs, in real time, which means a better end-to-end customer experience delivered more cost effectively – in the end, everyone wins.

By John Fleming, marketing director, Webtrends EMEA