Many of the banks First Manhattan Consulting Group works with are focusing their energies creating insights out of customer data and integrating them to sales, servicing, and risk management processes. Banks are swimming in ever-increasing volumes of data about customers and markets. Many are starting the journey to becoming truly data- and analysis-driven organizations, and taking steps to quantify the value of analyzing this data and launching related initiatives. As one of many examples, while many banks allow customers to open accounts online, relatively few are yet able to employ data-driven digital marketing strategies tailored to attracting and selling to new and existing customers over public and secure online properties. Banks want to use customer-level data on product holdings, channel activity, and profitability to improve the targeting of online campaigns and make account application and funding processes more seamless and effective.
Another way innovative banks are starting to use data to improve sales and servicing effectiveness is in the realm of small business and commercial credit, where a surprising degree of origination and servicing data and processes are fragmented and/or not automated, at significant competitive cost.
The ability to turn around a credit decision quickly is an important differentiator for lenders, because businesses seeking credit may value getting an answer more highly than shopping for a rate. At the same time, lenders must be able to make these decisions in such a way to not expose the bank to undue risk. This requires trustworthy data and actionable analytics both before and after the loan is made (i.e., by enabling an early warning system that monitors portfolio exposures to individual borrowers, industries, and other market segments).
Lenders are therefore increasingly realizing that consistent and complete data needs to be available across these dimensions to make faster decisions, reduce risk, and improve service quality.