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With Big Data Comes Great Responsibility (to Your Customers)

Big Data represents a significant opportunity for banks to enhance the customer experience and boost retention. But digging through massive amounts of data to find the right information about a customer also presents a great challenge to overextended IT organizations.

In 2009, the McKinsey Global Institute estimated that U.S. banks and capital markets firms collectively had more than 1 exabyte -- or one quintillion bytes -- of stored data. In the subsequent years, that figure surely has grown exponentially, as banks continue to amass massive amounts of data on customers.

All that data means there is a prime opportunity for banks to glean information to improve their customer experience and retention. There are challenges, however, to getting there. Banks have talked for years about using data and analytics to get a better picture of the customer -- and with all the data available today, the industry finally may be close to reaching that goal. But how can banks mine the massive amounts of data they've accumulated to pull the most pertinent information that will allow them to best market to a customer, especially when that data is housed in multiple silos?

The problem of how to access the right data from so many disparate locations is a prime concern for many financial institutions, says Emmett Cox, SVP of customer experience for BBVA Compass, a subsidiary of Madrid-based BBVA (US$740 billion in total assets). After all, he notes, all the data in the world is worthless if you can't use it. In fact, Cox says," Data without use is overhead."

For that reason, Cox says, BBVA has embarked on a large-scale project to centralize its data and build a master data set. The endeavor is not going to be easy, he acknowledges, but it will be well worth the effort. "It's not something you do overnight, or within a year, but it takes a three- to four-year strategic plan to do," Cox reports. "The difficulty is huge, but the potential is so great that it far outweighs the cost and complexity." He adds that while the centralized data project is being built, BBVA still has the capability to access the data as it is migrated, and the bank can use the master set as it is being built.

According to Cox -- who was the senior group manager of analytics and insights for Walmart Financial Services before joining BBVA -- financial services companies, while getting better in recent years, lag far behind the retail sector in terms of mining data and using analytics for marketing purposes. But, he adds, most banks now realize the importance of managing big data and likely have some sort of plan to centralize data. "Everyone is going through the same type of growing pains," he notes.

Keeping the Customer Happy

James Gifas, EVP, head of global transaction services (GTS) solutions, U.S., for RBS Citizens ($130 billion in total assets), says mining big data and leveraging analytics play a vital role in customer retention at the Providence, R.I.-based bank. "We employ a variety of proprietary and third-party tools and technologies to facilitate the sales process and to monitor client effectiveness, client usage and client satisfaction," he relates. "We believe this constant interchange of information -- a continuous loop of market intelligence -- enhances the customer experience and bolsters customer loyalty by improving efficiency on their end."

Efficient data mining allows RBS Citizens to be more customer-focused and to develop solutions based on market intelligence and data that "tells us what the customer wants, not what we think they want," Gifas says. "Harnessing customer data also enables us to help identify clients that could benefit from efficiencies, streamlining operations, consolidating banking relationships, and improving the management of their payables and receivables. And it allows us to spot any problems customers might be having -- it could be a training issue, it could be a product issue, it could be a defect in the offering -- that we then can quickly address."

Obtaining such a view of a customer is especially crucial in today's business climate, in which customers have no patience for communication they feel isn't specifically targeted toward them, says David Wallace, global financial services marketing manager for business analytics services provider SAS, (Cary, N.C.). "In general, customers are much less tolerant of interacting with institutions they don't think understand what their needs are," he says.

Wallace notes that the relationship consumers have with their banks is fragmented across more channels than ever before. A bank needs to be able to recognize the same customer's interactions with the institution on the web, via social media, on a mobile app and in the branch, and use that information to try to give customers exactly what they are looking for, he says.

Wallace stresses that banks can best utilize big data by harnessing it to improve service and the customer experience, rather than just for pitching new products. "Across banking, the data exists now to understand how to best serve the needs of customers," he says. "The key is to continue to improve and refine the customer analytics to understand them better, and use those analytics to create and nurture ongoing, interactive, real-time dialogue with customers."

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

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