The importance of data integration in banking analytics
- June 15, 2019
- Posted by: Admin
- Category: Uncategorized
To enable deep analytical insights and to build 360-degree views of your bank’s customers and operations, data must be pulled and integrated from disparate data sources.
A strong banking analytics system will achieve these goals by integrating and operationalizing data systems for ongoing analytics use. Besides a core banking system, data used by financial institutions resides in multiple structured and unstructured data sources.
Integration of multiple data sets
Bank data sets
Banks already own several customer data sets. These sets often reside in multiple departments – marketing, savings and checking, loans, ATM usage and mobile banking applications. Each of these discrete data sets, pulled together, create a rich profile of a customer’s past digital footprint.
Combing multiple discrete data sets can help in building a tool for predicting customer expectations and behavior. Many relationships become apparent only when compared with widely varying parameters. Data integration pilots to bring together small samples of information can reveal the potential of large-scale implementation for new products or services.
External data sets
Banking data reflects a customer’s previous interactions with the institution. With robust banking data analytics, the past can predict future behavior to a degree.
Every customer leaves a current digital footprint through social media. The customer may discuss the fact that he or she is car shopping, thinking of buying a house or renovating a home or switching banks. Without the integration of such external data sets, a bank would not know to subtly steer a customer to their local branch for an excellent rate on a car loan.
Total integration to accelerate growth
Advanced analytics, integrating both internal and external data sources, can be used for industrial-scale solutions to exploit data for authentic business insights and vastly improved decision making.
Rich real-time data-numbers and also text, voice, and images-now exist for literally every action that customers make, every product that banks sell and every process that banks use to deliver those products.
Enhance the internally-rich data with external social insights to create a powerful means to engage current customers and attract new customers through targeted, specific campaigns.
Delivering on the promise of digital banks
Banks encounter a number of instances in which real-time data is not necessary. Many back-office functions, such as drawing reports, performing statistical analysis and HR functions, do not require up-to-the-minute information.
On the other hand, customer-facing functions benefit tremendously from real-time data integration. Customers want, and sometimes need, to be able to pull their data instantaneously. In a world where mortgage pre-approval can be accomplished via cell phone, your bank does not want to lose an opportunity simply because you are stuck in the stone-age of filling out countless forms and waiting months for approvals.
Analytics and algorithms
Truly digital banks rely on robust banking analytics, including AI and machine learning, to integrate customer experience (past patterns in bank data sets) with customer expectations (gleaned from external bank data sets.
Banking analytics holds the key to delivering on the promise of digital banks. Today’s algorithms perform in a matter of moments analyses that, in the past, would have taken weeks. Secure data storage and cloud-based technologies allow banks to take advantage of banking analytics, improving their profit margins even during a time of economic slowdown.
Increasing your bank’s future profitability
Applying banking analytics with enhanced data integration, your future profitability may come sooner than you think. While banks traditionally take a long-term economic view, an investment in the appropriate technology can have immediate benefits.
Increase customer growth
As your bank becomes more digitized, you will be better able to meet customer expectations regarding their finances. You can tailor the products and services that you offer based on their individual profiles.
Customers who feel appreciated on an individual level, whether your bank is large or small, remain loyal to your institution and recommend it to their friends. Not only will your customers increase the amount of business conducted at your bank, but your portfolio will grow organically as they recommend your services to their friends and family and start discussing your bank on social media.
Increase your productivity
Time is money. Why utilize the efforts of several individuals over the course of days or weeks when today’s algorithms can produce the same results in seconds or minutes? Your talented personnel would be better used – and happier employees – if they did not have to perform menial tasks by hand and could focus on their areas of expertise.
Increase on-line banking safety
Banks are risk-adverse by nature because customer relationships are built upon the trust your customers place in your institution to safeguard their assets. The rise of the digital relationship between banks and their customers places a strain on this level of trust.
Build upon some of the systems that other banks already have in place such as instant notification if your bank encounters suspicious activity on a customer’s account. Helping your customers maintain their credit rating increases their loyalty to your bank and the likelihood of your loans being repaid.
For new potential customers, today’s banking analytics can assess the risk of any given loan in a matter of minutes. Reducing your exposure to credit collections and potential write-offs pays off in the long run.
Increase pathways to your products
Customers are no longer always interested in human contact when it comes to their banking patterns. Depending on their business hours versus the bank’s business hours, a customer could go for months without ever interacting with a member of your team.
Your omni-channel experience allows your customers to conduct their business on their terms. What may start out as a simple mobile phone search for your products could turn into completing a credit application on a laptop later that evening with an expected response time of that day. Your banking analytics allows you to offer these varied pathways while still maintaining minimal risk for you and your customers.
Do not panic
If all of this discussion of data sets, banking analytics and real-time data has your head spinning, wondering how you will ever meet your customers’ needs, take a deep breath and calm down before putting the “For Sale” sign on your bank.
PKSI (Pegasus Knowledge Solutions) is an industry leader in banking analytics and data integration. No matter where you are on your path towards becoming a truly digital banking institution, PKSI can lead you through the rest of your journey.
Contact PKSI today to begin customizing your digital experience and start realizing your potential profits.
Financial Analyst, Pegasus Knowledge Solutions