You’ve probably heard that banks and credit unions have access to a treasure trove of consumer data. In the past, financial institutions struggled with data silos, and valuable data was often neglected or never properly integrated and analyzed. The idea of Big Data can be daunting for smaller institutions, but it is rewarding for FIs of all sizes to focus on smaller, specific data points and create actionable insights.
We’ll discuss some small data points that improve consumer loyalty and share of wallet.
Big Data vs. Small Data
The financial services sector is one of the most data-driven and data-intensive industries. Big Data is a hot topic, but in this post, we aim to explore the utilization of small data as well. Big Data, like your consumer's transactions and credit card expenses or call center call volumes, are huge and complex datasets that need to be organized before they can be utilized for things like predicting consumer behavior or preventing fraud. Small data is simple enough for people to understand and its volume and structure make it accessible, informative, and actionable without the use of complex systems and machines for analysis. While more financial institutions are investing in technology to organize sets of Big Data’s more digestible small data points, like which questions do consumers commonly call about, should not be underestimated to help create profitable, actionable insights from the vast amount of data that FIs have access to.
How Does Data Improve Consumer Experience?
When consumers open an account with a financial institution, they provide some standard personal information: name, birth date, address, Social Security number, and gender. As consumers increasingly interact with their accounts or utilize their debit/credit cards, financial institutions glean information about their money habits and identity.
Banks and credit unions that invest in effective methods of data collection, organization, and analytics are able to paint a clearer picture of their consumers. By utilizing organized data sets, FIs can build individual personas, segment consumers, and identify personalized offerings for specific needs. These needs may include investment products, a HELOC, a particular savings account, and a plethora of other opportunities. Your FI has an array of beneficial products and services, and using small data points will help you successfully tailor these products to the right people.
FIs learn a substantial amount about their consumers’ lives, and data can reveal major life events. An adjustment such as a name change could signal a marriage, or a large withdrawal can point toward a substantial debt payoff or purchase. Advancements in technology, such as machine learning and artificial intelligence, help banks and credit unions sort through data and create the personal experiences that consumers expect. Below we’ll discuss some smaller data points that will help you provide a better experience for your consumers.
Mobile Banking Usage Data
Within a decade of Apple’s iPhone launch, mobile banking became the primary channel for day-to-day transactional engagement. Today, mobile banking data can tell you who your best consumers are and who your most disengaged users are that might be looking elsewhere for a financial partner. But you can’t simply trust a single large data point from your core system that tells you consumers have mobile banking. You need to know from smaller data points how they’re using mobile banking.
Determining which consumers are logging in to your mobile application in the last 30 - 45 days will unlock opportunities to re-engage users who are less active by showcasing new features and functionality of which they may be unaware. It can also give you a great headstart on focus group members (e.g. high use and low use) as you look to improve your mobile banking experience.
Loan Application Completion
Banks and credit unions can use lifestyle indicators and predictive data to pinpoint consumers who are currently making loan payments to other institutions or who have shown interest in loan products on your FI’s website. You can market competitive, personalized loan offers to your consumers, but it’s also important to pay attention to the application process itself.
FIs can improve the process based on smaller data points within the application process. You can see where consumers gave up on filling out their applications or the popular days/hours for applications. After analyzing these data points, employees can be readily available during these busy times to answer questions and speed up the approval process. After seeing where consumers typically exit out of their application, FIs can fix its problem areas, add clarifications, or ask for more specific information from applicants.
Even if your loan origination system (LOS) doesn’t have all of these functionalities, FIs can add an additional step before redirecting them to the LOS. This step captures applicants’ emails so your team can follow up with them in case of incompletion. This is one of the lowest hanging fruits for most financial institutions, and Prisma makes this easy to harvest. These methods will improve your consumers’ digital experience, encourage more loan application completions, and help your consumers achieve their financial goals.
As many new consumers first look to your website to find out more information, it’s important to regularly evaluate your website performance. By looking at smaller data points from your high-performing pages, including how long users stay on a page, which links are clicked, or if they hover over a certain section, your FI can analyze the common themes that these pages share.
Pages with thin content and generalized information lack storytelling abilities and don’t help market your FI’s offerings. These pages typically don’t perform as well as the pages with purposeful content, strong calls to action, and elevated design. The ability to track your consumers’ activity is a productive way to offer them personalized content based on the pages they are browsing. To better engage your existing and future consumers, it’s important to regularly evaluate your website pages to provide the elevated digital experience that people now expect.
Using Small Data for a Big Impact
Small data points can generate big wins for your financial institution. Although Big Data is a hot topic in the financial services industry, it’s important to look at the specific, smaller consumer data points that you can mine for actionable insights. Insights from organized data lead to more positive outcomes for your FI: accurate segmentation, holistic views of the consumer, and straightforward cross-selling. To increase consumer loyalty and share of wallet, your FI can use smaller data points to support your consumers and help them achieve their financial goals.
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