Behaviour Based Customer Insight: An open letter to my bank

To the bank that co-owns the roof over my head and holds my hard-earned savings,

Please, stop sending me offers that are irrelevant to my financial position and my stage in life.  Stop communicating with me via mediums that I find outdated and inconvenient.  Most of all, stop treating me like just another customer and treat me like an individual that has chosen you to be my financial partner in life.

All I ask is that you anticipate and service my financial needs.  Use what you know about me to deliver a seamless and interconnected engagement regardless of where or how I am engaging with you.

Make it convenient and easy to interact with you.  Offer me simple and easy access to banking services, on my terms.

Be there when I need you, not when you need me.  Empower me with real-time updates, proactive communications and choices at a time that suits me.

Remember all of my intentions.  Understand me and my preferences through our past interactions, and use that understanding to serve me better.

I know you group me with similar customers based on my demographic, income, accounts and balances, sending me offers en masse based on this naive understanding of my intentions.  Know that not all thirty-something working mothers in my area are the same – we each of our own financial expectations and aspirations in life.

When I share information about my personal situation with you, it’s because I want you to use that insight to better understand my spending habits.  I share because I want you to preempt my next life or financial event, and make recommendations to help me work towards- and achieve- my goals.  I want to you to understand the value that I bring to your organisation, and proactively engage based on anticipated spending and financial impact.

You see, dear Bank, I am possibly your toughest critic — because I know the art of the possible when it comes to data and analytics.  I know how much data you have available to you today about my historical transactions and social opinions.  I know how easy it us for you to tap into that data by leveraging pre-defined business metrics, supported by industry-specific data models and integration points.  I know you can tap into pre-built analytics to generate precise insights focused on a specific business need.  I also know you can provide decision makers with interactive apps and dashboards so each and every decision made about me, is in fact based on knowledge about me.

I know this.  But did you?

Did you know that Behaviour Based Customer Insight can generate advanced customer segmentation and predict life events, so you can improve offers by identifying the precise financial products I need, when I need them?  Did you know IBM provides a pre-built solution, bringing together the strengths of the IBM Analytics platform with pre-defined models and dashboards, so you can get to insight quickly and with minimal effort?

Let me share an example.

Christine, a regional banking manager, is looking to grow revenues from new products and improve customer satisfaction in retail banking.  She looks at the segmentation models for her region – segments that are based on behaviour instead of the traditional deposit of account balances.  She sees the largest segment:  a set of customers who spend locally, own homes, and have consistent cash flow month to month.  She looks at the predictive insights provided to her and sees the likelihood of overdraft is high in this particular segment, and knows that overdrafts are irritating to good customers and often create unnecessary work for multiple channels at the bank.  Since the homebody segment is her largest, she drills down to look at a list of most likely customers to overdraw in coming weeks.

BBCI Identify Groups

Her view of likely clients is based on both recurring deposits and payments enhanced with predicted spending patterns.  Of the list of customers who’s spending pattern suggests a propensity to overdraw this month, she selects Michael, an affluent client, for further consideration.

Michael’s profile shows Christine that he has a cashflow which will likely create an overdraft, notes he had an overdraft last month, and does not have products like overdraft loan or sweep accounts to cover the amounts he will need.  Michael does most of his banking online and Christine can make product offers and add value to the relationship – much better than the irritating overdraft fee that might drive Michael to migrate his banking to other providers.  She also can see spending detail which might indicate significant life event and trigger recommendations for other products and services from the bank.

BBCI Individual Client

Of course this insight is not just of value to Christine.  Michael signs on to his iPad banking app and sees new content pushed to his home screen.  He has an overdraft warning, a cashflow graph, and a view of recent spending.  The behaviour based analysis has noted high expenditures on home fix-up merchants this month and drives a question that could lead to follow-up by the bank on this identified life event….a new mortgage, or a loan improvement product.  Michael is a much more satisfied customer and will increase his wallet share with the bank.

BBCI Mobile Banking

Of course, it’s not just about Michael (and me).

Behaviour Based Customer Insight has shown to improve customer lifetime value by 25%, increase loyalty by 30%, and increase retention by 30%.  It can also improve conversion rates by 40%, reduce default rates by 30%, and lower customer acquisition costs by up to 50%.

It’s Win-Win!

My dear bank, I will continue to answer your customer survey questions.  I’m happy to share my social media profile with you.  I’ll even agree to you tracking my mobile phone location.  If, and only if, you use that information to provide me with a more personalised customer experience, offering me only the products and services I need, when I need them, via a medium that is convenient to me.  And when I say “me”, I really mean 63% of the population who agree with me!

Yours faithfully (unless you continue to treat me like a demographic),

Katrina Read