Applications of Customer Intelligence in Predicting Banking Revenue Growth and Profitability
The blanket approach no longer suffices in today’s increasingly competitive market characterized by a significant proportion of ‘woke’ consumers. For a bank to be genuinely customer-centric & ultimately profitable, it must build deeper relationships with its customers by leveraging internal and external datasets. The latter is underpinned by customer intelligence, which converts structured and unstructured customer data into actionable insights.
This article will outline two areas within banking that will yield the most bottom-line impact through practical customer intelligence.
The first area is within strategy tracking and definition, allowing banks to adapt to new trends and formulate new products due to being inspired by analytics leading to good questions concerning trends. Banks sit on large datasets, especially transactional data. There is an excellent opportunity to employ the scientific process in A/B testing consumer trends, delivering on unanticipated future needs, and defining strategic and contextual partnerships for rewards programmes.
Secondly, consumer behavioural analytics as an ongoing credit risk management tool will be crucial, given its direct contribution to the bottom line in terms of IFRS9. The covid-19 pandemic has highlighted the importance of credit risk management and the societal role of banks. Customer intelligence will thus enable banks to proactively aid customers in terms of debt counselling, identify risk pockets to be avoided, and employ non-traditional data sources in contextualizing loan offerings. It is worth noting the potential non-traditional data sources have in aiding financial inclusion, as epitomized by Branch, an app that provides access to instant loans with no physical documentation.
The fast-paced and complex future of 4IR requires banks to leverage off fintech solutions in impelling their overall strategies in solving Africa relevant basic needs while simultaneously remaining profitable.
