Mastering Data Management
Certain banks are farther along than others in being able to drive customer acquisition through data and analytics, and those institutions have started to master their own data management, says Chandan Sharma, global managing director of financial services marketing for Verizon Enterprise Solutions.
“They’ve elevated data management to a high-level… they also recognize the importance of creating these functions around data management in the right place within their organization,” he observes. “It’s then easy to have a cross-enterprise view of the customer.”
Sioux Falls, N.D.-based Great Western Bank ($9 billion in assets) is one example of an institution that has done extensive work around data management, and is now using that work as a stage to launch new customer acquisition and marketing initiatives.
“Our biggest challenge in using data and analytics for marketing and customer acquisition has been data quality, making sure that the codes are there for different documents and records,” says Ron Van Zanten, the bank’s vice president of data quality.
To address this issue the bank created a data committee with members from different teams across the organization, Van Zanten shares. The committee, which reports up into Great Western’s business intelligence operations council, created standard definitions that teams across the organization now use for different tiers, pricing and terms on accounts. Those definitions are now standardized across Great Western’s various systems, Van Zanten reports.
That data quality work has served to gain buy-in from employees across the organization by building trust in the bank’s data, Van Zanten adds. “If you have people in your organization who look at a report, and they say, ‘My loan numbers don’t match up,’ and that’s true, then it brings about doubt across the organization in what you’re doing,” he explains. “We can now validate our data, and the work that we’re doing with it.”
Gaining that buy-in across the organization isn’t always easy. Van Zanten’s team has been working to centralize Great Western’s data in its data warehouse. Sometimes parts of an organization can be reluctant to give up their data, he notes.
“We’ve taken the ‘source of truth’ from different silos and put it in our warehouse… some people have to give up the keys to their kingdoms. But this is now freeing up our staff to do new things, instead of producing the same old reports,” he remarks.
With this clean, well-defined data in hand, Great Western has started to cast a net for more profitable customers to help grow the bank. Great Western used to give away free checking to new customers in its branches, but now with the knowledge gained through its data management, the bank is working to entice customers who will have a more sticky relationship with the bank and buy value-add services, Van Zanten says.
About two months ago Great Western started purchasing demographic data from Experian to add to its own data and start to build profiles of what profitable customers look like and how to market to them, Van Zanten reports.
“We’ve built a new system so when a new customer opens an account we can see what similar customers like. If they open a debit card, we can offer things like direct deposit and push e-statements… and entice them to a more sticky relationship,” he adds.
The bank has also worked to better price its products for profitability by factoring in the cost of expenses on products into their price. “We can bake in the cost of funds transfers and operational costs, and take direct income and expenses on accounts, and then post those against savings and loans,” Van Zanten explains.
Great Western can now assign a numeric digit for onboarding a particular account, such as a consumer checking or a small business account, and fully understand the cost of servicing that account.
Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio