MIS Asia: Cognizant’s Vice President and Head of Asia-Pacific Writes About Banking Right in a Code Halo World

“Banks can no longer afford to guesstimate customer preferences—that is expensive as well as ineffective. Instead, all banks need to do is turn to the wealth of digital information that surrounds their customers,” writes Jayajyoti Sengupta. “Increasingly, every digital click, swipe, “like”, buy, comment and search produces a unique virtual identity around every individual—a Code Halo—that offers unprecedented insight into customers’ behavior, preferences and needs.” Excerpts:

“By tapping into and analyzing this data, banks can understand their customers better, react faster when needed, and anticipate their future requirements. A recent survey indicates that in the deposits business alone, for example, banks in Asia Pacific can deliver more than 20% additional revenue by using analytics.

Consumers’ digital lives are rewriting the rules of banking. Their accent is on personalized options—lots of them—and they want them now. This is where new data modeling and predictive techniques hold tremendous promise. By helping banks create insightful digital strategies, these technologies can enable them to deliver more personalized customer experiences.

New digital channels require fresh, new and innovative ideas—such as presenting context-based offers to customers at their preferred point of consumption, or using geolocation services to generate custom offers. At the heart of these digital channels lies a new value proposition underpinned by free exchange of information between banks and customers.

Moving toward micro-segmentation and arriving at personalization is an evolutionary voyage. It is pivotal to start small, and gradually build a program, fine-tuning it based on latest findings and successes. Banks have lagged behind their retail industry counterparts in embracing digital—and retailers’ successes have raised customers’ expectations for online experiences—it is time banks started catering to the new digital reality as the industry continues to evolve and accelerate. To get started, here are the steps banks can take to begin creating insightful digital strategies and channels.

Determine inherent organizational constraints to sharing customer data across different departments, and identify the changes that will work in your envi­ronment with the least initial disruption. Prioritize the highest and lowest cost channels, as they will yield the most benefit from the least effort. Audit the data sources for availability and suitability, and assess data gaps and determine remediation. From there, create a data strategy that supports your objectives.

New objectives probably mean organizational change, which typically involves retraining and functional role modifications. Assess sectors which require changes, and ensure your bank grows by following best practices for organizational change management. Customer-centricity is more than reframing existing processes; it involves reinventing customer-facing processes through the use of techniques such as customer journey mapping and new technologies.

Analytics is the cornerstone for achieving greater insight into customer propensity and preferences, as well as for correlating the data needed to achieve a suitable degree of digital segmentation. Many of the standard technologies no longer do the job for banks when it comes to predictive analytics, and understanding the new options is a top priority. Be sure your organization has a plan for integrating the new functionality with its existing data sources.

For banks, getting to know customers cannot be a matter of speculation any more. It is only by embracing the new digital reality that they can deliver truly personalized experiences and strengthen customer relationships.”

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