Why Should Banks Care About Obtaining A Customer 360 View
Traditional banks with siloed customer data are seeing lower customer experience levels and even losing customers due to the rise of digital ecosystems. Take the growth of fintechs as an example. A study shows that the fintech industry has an 8.6% cumulative average growth rate (CAGR). The global fintech transaction value is projected to have more than 62% of its share coming from the U.S. by 2025.
The struggle to obtain a comprehensive customer 360-degree view has significant implications for banks in today’s customer-centric banking landscape. A Customer 360 view provides a holistic understanding of each customer, enabling banks to deliver personalized experiences and build stronger relationships. Let’s look at how failing to obtain a customer 360 view can impact traditional banks.
Missed Personalization Opportunities
A McKinsey survey revealed that 71% of consumers expect personalized interactions with companies, and 76% get frustrated when they don’t find it. Customers are willing to share personal information to get what they want from banks.
A comprehensive customer 360 view is the foundation for personalized banking experiences. However, according to Deloitte, banks need access to unified customer data, which is proving challenging due to legacy technology. Banks lack a holistic view of their customers due to the lack of real-time advanced analytics and inflexible customer databases.
Inefficient Cross-Selling and Upselling
Banks must apply routine innovation to improve existing offerings to meet customers’ needs. Fintechs make upselling and cross-selling a focus of their customer relationships. And various studies have shown that this kind of growth is by far and away the most profitable.
A robust customer 360 view allows banks to provide targeted offers and recommendations based on individual customer behavior and preferences. But due to a lack of complete understanding of a customer’s relationship with the bank, banks often struggle to offer relevant products and services that align with the customer’s financial journey. This can lead to missed revenue opportunities and a reduced share of wallet for the bank.
Impact on Customer Service
A fragmented view of customer data can lead to inefficiencies in customer service. When customer information is scattered across different systems and databases, bank representatives struggle to access relevant information during customer interactions. This can result in redundant data requests and a disjointed customer service experience.
Effective customer service requires a unified customer view that enables representatives to access all relevant data in real-time. Customers value efficient and seamless interactions with their banks, and any hindrance in delivering such experiences can negatively impact the bank’s reputation and customer satisfaction.
Banks that struggle to obtain a customer 360 view risk falling behind their competitors who have successfully embraced data-driven strategies. Digital-native fintech startups and banks have emerged as formidable competitors, leveraging customer data to deliver innovative and customer-centric experiences.
Banks must prioritize data integration and invest in cutting-edge technology to stay competitive. A comprehensive customer 360 view empowers banks to increase customer satisfaction and loyalty. Embracing customer-centricity and leveraging data insights are critical steps for banks to position themselves as trusted financial partners in the digital age.
Posted on Aug-07-2021