How data science will change the way banks relate to people

By Tatiana Vorontsova, Group Account Director at data science consultancy Profusion

There’s an idealised image of town life, perhaps 40 or 50 years ago, where high streets were full of independent shops, bread was delivered by a boy on a bike, everyone said hello to each other and you could leave your front door unlocked at night. In this Werther’s Original vision of Britain, the bank manager was a person of high esteem who knew every member of the community and tailored the services his bank offered accordingly. Life has moved on and so too has the role banks play in our everyday lives. I would be surprised if anyone could name their local bank branch manager. Similarly, it is a very tall order to expect bank employees to have substantial personal knowledge of every customer.

Marketing, automation, online and telephone banking services, as well as an expansion in the number of branches in urban areas, have combined to improve many aspects of customer relations and service, however, they have reduced the very personal connection many people have with their bank. It is therefore incredibly difficult for financial institutions to apply a truly personal touch to customer relations. This is where data science can step in and help.

Never before has so much data about individuals been readily available. From social media to ecommerce – online information paints a vivid picture of how people live. By combining it with the data a bank normally holds and then using data science techniques, financial institutions can build up a complete image of each customers. This can help to replicate the old-style, personal relationship individuals had with their bank managers.

Of course, this is not just an exercise is resurrecting the ‘good old days’. By better understanding their customers, banks can improve how they offer their services, predict their customers’ needs and, crucially, improve their relationships. For example, by using existing marketing methods, banks can select the right current account or financial product to offer to the right individuals based on their profile, transactions and demographic information. However, by using data science, a bank would be able to predict not only what type of account they should offer an individual, but the exact moment it is needed, how the account could change in the future and what incentives would be most appropriate. This message can also be delivered via a channel and in a form that the customer would find the most convenient.

This is a very basic example, nevertheless, the principle applies right across every service and function banks offer to their customers. It is also just the beginning, beacon technology can help staff identify customers as they enter the branch. Their online information can be quickly married with behaviour in the branch, allowing better service and giving banks a better understanding of how customers use their branches.

The role major institutions play in our lives is changing on the back of the technological revolution. Not all of this is for the better, people rightly raise security and privacy concerns. However, banks, by their very nature, have the highest regard for their customers’ personal information. This puts them in a unique position of being able to maximise the data they use to relate to customers while also maintaining trust.

By incorporating cutting-edge technology and leveraging the unparalleled insights data science provides on individuals, banks can revolutionise how their customer relations and marketing campaigns work. For the consumer, it will mean better services that align more closely with their needs and aspirations.

3 Responses

  1. george

    This is a pretty naive approach of the situation of global economy today and the role of banks in our society .
    Long gone are the times that there was such a demand.I think the problem banks are faced with in the near future ,is where to find customers.More and more people are realising the effect that this blind trust to the big corporate world has on their own lives,and more and more people are taking their distances ,when they can.With exception the states that are organised in such a way that everything has to go through the bank,the rest of the world doesnt really benefit by any of this.Big data can make a great contribution in society ,but not in the hands of the same vultures that for 100 years and more have exploited the rest of the human race.
    Maybe it is of interest to some investor ,who needs the admiration of his fellow investor vultures to feel great,there is the power trip involved in all this,having the bank manager standing up when you enter and pretend he respects you somehow …When we drop the false pretences in our world,there might be a small light at the end of the dark tunnel we are now.As long as we promote prototypes that are against our own existence,well we cant expect much…I hear you asking ,what else could we do?they have the power…:)Of course they have,the power that we give them,the power we allow them to have.If we change the way we think ,the way we want to live our lives ,and start valuing the things that really can make us better humans,(like sharing,equality,justice for all,and other insignificant things like these/),unless we realise that there is a balance and we ve lost it long time ago ,and we better start trying to get it back,well there is no real hope for future generations.Maybe we can escape and die earlier than that.But for sure the world we are leaving behind is not what we inherited,it is a lot worst.We had a chance.But greed got the best of humans…maybe now its another chance.But we first need to stop following this dead end way of wealth out f thin air and exploitation of the weak.If we dont change we will be the next “weak”…soon baby soon…
    Back to our banks for now.

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