Data isn’t just an important part of the future. If recent trends are to be believed, it may very well be the future itself.
That much is abundantly clear, even now: collecting, processing, and understanding data are now all vital to doing business in the modern age, regardless of industry.
Banks, in particular, parse astronomical amounts of data generated by their customers each day, from new account applications to the spending habits of their longtime consumers. Knowing how to understand this information and harness it meaningfully can be extremely rewarding for your financial institution. This is especially true in terms of better understanding your customers, the performance of the products that you offer, as well as various other market trends.
However, antiquated methods of dealing with data are not only ineffective but also terribly inefficient in the 21st century. The sheer volume of information to analyze alone renders most traditional approaches firmly and irrevocably obsolete. That being said, read on to learn how advanced financial services analytics can help improve your bank’s operations.
Analytics software is the best and easiest way to manage the incredible volume of structured, unstructured, and semi-structured big data that your bank has to process on a daily basis. With data analysis software, your financial institution can turn raw information into something that is both valuable and actionable. Here are a few instances where data management through software can be an asset to your enterprise:
It creates a unified data source
The best data analytics software can collect and aggregate all of the information that passes through your financial institution. It can then cleanse it, standardize it, and reconcile it to create a visual and interactive platform that can easily be understood and used by a variety of different stakeholders throughout your organization. Multiple business functions can be performed with the produced data set while retaining completeness, accuracy, and financial integrity.
It eliminates the risks associated with poor data management
With data analytics software, you can expect consistent results from your business applications, allowing your enterprise to take advantage of emerging opportunities, mitigate risks, or drive performance with real-time insight and awareness.
It increases efficiency and productivity
Software solutions greatly reduce manual inefficiencies and enable your financial institution to make objective and data-driven decisions more quickly and easily.
Better customer understanding and targeting
Banking products are increasingly becoming more commodified, making it difficult for some financial institutions to gain an edge over their competitors. Data analytics can help banks differentiate themselves by enhancing the customer experience right from the onboarding stage.
Advanced analytics solutions can use data obtained from your clients to build detailed customer profiles. These profiles take various factors into account including your customers’ demographics, the number of accounts they have, which banking products they currently patronize, as well as which offers they’ve previously declined. Said profiles can also include major life events, the customer’s relationship with other clients, their attitude towards your enterprise and to financial services in general, their service preferences, and so on.
All these can be used to build a complete 360-degree view of the customer. From there, your institution can tailor the experience for them accordingly. Remember: tailor-made services result in higher customer acquisition and retention rates, demonstrating the true power of understanding your clients more fully.
In addition to providing you with real-time insights on what your customers want and need at present, big data and analytics can also help you identify opportunities for upselling and cross-selling. This is done by examining historical information, purchasing habits, and behavioral patterns to determine which products your customers are likely to be interested in later on.
Enhanced fraud detection
Data science and enterprise-grade data analysis solutions can also protect your customers and the integrity of your financial institution from fraud. For one, they allow customer due diligence to be carried out automatically and more efficiently, enabling your financial institution to perform comprehensive risk assessments with just a few keystrokes. They also inform early warning systems in the event of suspected fraud and prevent suspicious transactions from being carried out successfully.
Additionally, advanced software solutions allow your bank to remain compliant with global regulations and reporting guidelines. Suspicious Activity Reports (SARs) and Suspicious Transaction Reports (STRs) can be automatically generated using out-of-the-box templates, thus dramatically reducing the time needed to prepare, review, and finalize them.
Put simply, there are plenty of functional areas in your enterprise that can be greatly improved by adopting modern data analytics and software solutions. From simple data management to minimizing fraud, analytics can provide your bank with assets that can ensure optimal performance across all of your operations. With analytics and analysis tools, you can also provide your existing customers with the exact products and services that they need. At the same time, this will distinguish your financial institution as a business with one foot in the future, attracting new clients in the process.