During the second half of 2015, Collinson Group collaborated with Future Agenda, the open Foresight programme, to run 12 workshops in eight countries involving 110 industry leaders and loyalty experts to debate what the future of loyalty holds. In our work with Future Agenda we specifically questioned the role that big data would have on the future of customer loyalty. Below are some key insights we gleaned.
The fervour for big data analytics sweeping through retail bank boardrooms at a global scale is intensifying as corporate strategy prioritises a shift towards true real-time intelligence. This is a marked departure from the ‘batch and queue’ approaches mandated by old legacy IT systems, and will accelerate over the next ten years. In India, banks are heavily investing in their customer relationship management systems. The goal is to improve their loyalty programmes, and improve their products and services based on customer feedback through digital channels.
The ability for financial organisations to make the most of data, monitoring and tweaking performance as they go will have a major impact on all areas of business, from the supply chain to marketing. However, the big retail banking institutions sit comfortably behind the fintech start-up challengers whose business models are founded in the cloud, and whose customers are willing to place their trust in this new approach.
Real-time data has a big role to play in engaging with consumers, as it enables organisations to understand their customers’ behaviours and attitudes towards their services, and by extension positively influence customer loyalty. High street banks are starting to recognise the need to get better at segmenting consumers into more narrowly-defined groups, and real-time data and the contextual relevance of engagement have vital roles to play here.
We will see an increasing number of financial brands promote their ability to penetrate social groups to provide products and services that meet the demand of these newly identified communities, mining large swathes of customer data in order to do so. In marketing terms, this is being referred to as identifying the ‘composite customer’, whereby brands cater to their customers based on shared interests and their involvement in groups and communities. This moves away from the traditional approach that segments customers by income, age and gender demographics that are becoming less and less effective.
Companies are slowly unearthing deeper insight which they can then deploy on their social media channels. In financial services, companies are making sure that their customers can login and use them securely, so that they become more effective customer service channels, while also a tool to track satisfaction levels. Several banks, such as India’s ICICI Bank, and South Africa’s First National Bank have developed applications where they can reach out to customers on the online platforms their customers choose to use.
This year, ICICI Bank launched ICIC Appathon, the country’s largest mobile app development initiative, with the aim of attracting the country’s brightest technology brains to create the next generation of mobile banking applications. India is among the top three internet users in the world, and customers are increasingly asking for mobile banking solutions.
Further, a recent study by Buzzom.com revealed that private and public banks in India have started to use social media as a platform to connect with their customers. For example, HDFC Bank invests heavily in its social media engagement programmes, with a strong presence across eight social media channels. Its Facebook page generates valuable feedback from users, which helps the bank understand its fans as well as promote banking products. The company has a ‘money matters’ section which is a useful source of information for their customers, and users are also kept engaged with puzzles and jigsaws based upon financial terms.
Insights gained from interactions through social media channels will help improve banks’ understanding of customer behaviour, which ultimately should result in fewer consumers switching providers. If shared experiences are what matter most to the customers of the future, banks will need to understand not only the individual customer, but the interests of their nearest and dearest too.
Consumers will be members of different communities using a variety of digital personas. Building a picture of this composite customer is only possible with strong data analytics capabilities. Improving customer segmentation through more timely and robust data analytics will require significant investment in the short-term, but it will pay dividends in the not too distant future.
The financial services brands that are able to crunch this data at an individual level stand to gain considerably as cross-selling products and valuable additions will boost their revenues. Mining the data and comprehensive analysis of these online behaviours will add relevance to loyalty initiatives and help banks retain their profitable customers—especially important as retention marketing costs half as much as acquiring new customer.
Author's Bio: Anurag Saxena, Country Head & GM, ICPL India