Finansliv, Sweden: Cognizant’s Vice President of Banking and Financial Services Explains why Customer Data is Banks’ Best Friend

“Consumerization of services and the proliferation of mobile banking are trends that are rapidly shaping the banking landscape. As a result, banks are increasing their focus on developing retail and customer-centric banking services to optimise the customer experience and maximise alternative revenue streams,” writes Sriniketh Chakravarthi. Excerpts:

“Despite Sweden’s position at the forefront of digitalisation, or perhaps because of it, greater customer demand and competition from non-banking players have given banks an increased   sense of urgency around the need to develop more customer-centric banking services. This requires banks to transition from an account-based view of banking customers to one that knows them as individuals and enhances customer experience with relevant, convenient and personalised products and services.

Banks that successfully shift toward tailored customer services are analysing what we at Cognizant call “Code Halos”—the clouds of data and information that surround every customer, employee, company and product—to differentiate how they service each customer. Banks can identify and use Code Halos by focusing on the following areas:

Context: Context can allow banks to deepen their understanding of the customers and optimise their customer experience. When using so called “big data” to improve customer-centric services, it is important to filter noise and create algorithms to pull actionable information and insight. With the right filters, banks can use the entire load of information they have about the customer, demographics, and their own services to build meaningful correlations between a customer’s needs and the products and services offered to them.

Security: Consumer protection and privacy are key and organisations that ultimately win will be those that generate, maintain and compete on trust, allowing customers to opt in or out from sharing data.

Individualization: Amassing a large amount of customer data is pointless if it is not used to create an individual experience for each customer. The bank that applies the information they already have about their customers to create more thoughtful engagements will establish a competitive advantage in the marketplace.

Anticipation: The Code Halo of data and information that surrounds every customer can be used by a bank to generate insights that will anticipate the needs of customers. If Amazon can anticipate the kind of products that its shoppers will want to buy next, imagine the impact a bank can have if it applies that level of insight to its offers to customers. Banks could create algorithms that will allow for analysis of a customer and predict their next need, with a service or offer ready to meet it.

Risk: Banks are also starting to use data in the areas of operations and risk such as in a trading environment. Analysis of trade data (Trade Halos) could potentially help banks mitigate risk and remediation costs of failed trades while analysis of user tickets and system alerts (System Halos) could help predict and manage IT failures.

As banks today increasingly compete with non-banking actors, they recognize the importance of using data intelligently to address multiple dimensions of their business, offering customer-centric services, meeting customer expectations and anticipating their future needs to create true value improvements to the services offered.”

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