How Big Data changes the rules in banking

Online banking has been a win-win proposition for banks and their customers. Customers get the speed and convenience of self-service and banks enjoy big savings on transaction costs. But for many consumer banks in particular, going online has also meant losing the critical customer engagement that branches have long provided. When one online banking service looks pretty much like every other, banks need to find new ways to set themselves apart. By leveraging cloud and big data analytics, banks can re-engage in new and innovative ways via web and mobile platforms.

In a recent report outlining a new digital vision for consumer banks, Accenture offer examples of what some banks are already doing to enhance the online experience and strengthen bonds with their customers.

  • Banco Bilbao Vizcaya Argentaria of Spain captures more than 80 transaction characteristics every time customers use their debit card and uses the information to help consumers manage and forecast day-to-day spending.
  • BNP Paribas Fortis of Belgium partnered with the country’s largest telecommunications provider to create a mobile e-commerce platform that enables consumers to shop and pay for products from their smart phones. The service makes it easier for consumers to find merchants and helps local businesses get paid more quickly, which is good for the bank’s commercial business.
  • Commonwealth Bank of Australia has a mobile app that enables customers to use augmented reality to get detailed information about homes they might want to buy by simply pointing their smartphone camera at the property. The app also tells users exactly how much they will pay for a mortgage from the bank.
  • Five of Canada’s largest banks have partnered with Sensibill to integrate automated receipt management functionality into their digital banking apps. Customers can use the service to organize receipts and get reports that help them with budgeting.

These efforts are successful because the banks see themselves as more than just money managers. They’ve broadened their perspective to become allies to their customers in helping them become more efficient and achieve their dreams.

The cloud offers unprecedented capabilities for banks to integrate other services into their core applications through APIs. For example, many financial services companies now offer credit reporting as a free feature. Credit agencies are eager to promote their brands through this kind of integration, and they make it easy for banks to work with them.

When cloud is combined with big data, banks can put their existing knowledge of their customers to work in new ways. For example, they can segment customers by spending and saving behavior and offer services tuned to different budgets. They can target services to distinct customer segments based on geography or age group by overlaying demographics on customer data. They can even listen in on social media conversations to pinpoint opportunities to offer, for example, car loans to fans of specific vehicle makes and models.

The biggest impediments to this kind of transformation aren’t technical but rather cultural. If banks see themselves as simply stewards of money, they limit their potential to break out of historical niches. But when they see themselves as allies in their customers’ financial success, they can use the cloud and big data to expand and enrich relationships. The mobile app is the new branch, and a good service provider can help your financial institution realize its transformative potential.