Open banking is creating a new financial services ecosystem. Driven by the combined forces of fast-paced regulatory change and increasing customer demand for data-driven services, banking incumbents are now serving data to authorized third parties.
As FinTechs increasingly gain access to financial account data and even payment initiation services, the banks’ hard-won relationships are in jeopardy. To get ahead of the next wave of FinTech innovation, today’s banking incumbents must make the most of every advantage.
Today, data is the most precious resource that banks possess. While FinTechs will be able to leverage some account-level data to drive their services, banks have access to rich, additional sources of data. For example, these include past customer interactions, purchase histories and satisfaction survey scores.
Many banks are already using analytics to surface insights from systems of record in the front- and back-office. However, this fragmented approach makes it difficult to gain a true picture of each customer’s individual needs and preferences.
To thrive in the new world of open banking to come, banks must turn their data into a source of competitive advantage. This means replacing the fragmented approach to analytics with a unified strategy that delivers deeper and more accurate customer insight.
To skiers, snowboards and skaters, a “ten-eighty” is three in-air 360 spins. In the world of banking, a “1080 view” offers new customer insights based on three 360-degree sources: front-office, back-office and third-party platforms such as social media.
In this new approach, insights into customer interactions with front-office systems will continue to play an important role. Customer interactions online, on mobile, and via the contact center enable banks to gain a solid understanding of how customers are engaging with their services.
Banks can enrich this view of the customer by bringing in data from back-end systems. For example, while front-office data can reveal each customer’s preferred channel, analyzing transaction data from the core banking system enables banks to harness predictive analytics to identify the most relevant products and services.
To bring the customer into even sharper focus, banks should aim to add a third category of data: externalities. This third-party data encompasses everything from public content from customers’ social media profiles to market interest rates and consumer price index histories. These sources offer banks a valuable additional perspective that helps them to situate customer relationships in their broader context.
By building a 1080-view, banks will gain a unique property that will help them retain competitive advantage in the coming wave of FinTech disruption. In the Virtusa white paper: “The Total Customer View: Old History or New Idea?”, you can learn how a 1080-view can help banks to ethically and efficiently leverage their data and foster long-term customer loyalty.
Written by Arvind Purushothaman, Head of Analytics, Insights and Data practice, Virtusa, the white paper explores why deeper insights into value, behavior, and performance will be crucial for banks to ethically and efficiently harness their most crucial asset. To read the white paper, click here now.