The banking industry is undergoing a significant transformation due to advancements in technology, changing consumer expectations, and evolving regulatory requirements.
The risks of inaction in customer-owned banks (mutuals) are similar to those of traditional banks, but there are some unique risks to this model as well. A major risk is losing member trust and therefore ‘customer lifetime value’ is at risk.
In parallel, falling behind in technology, limited product offerings, regulatory non-compliance, and member retention all are high-risk components of a lack of focus and transformation activities.
Customer-owned banks must be proactive in meeting member needs, embracing technology, and complying with regulations to remain competitive and relevant.
Banking institutions can benefit greatly from prioritising data management as a foundational step in their transformation journey.
So to avoid the risks of inaction, where is the best place to start with a banking transformation?
Solving data management first is critical for customer-owned banks to make better decisions, offer personalised service, enhance efficiency, mitigate risks, and increase revenue.
Customer-owned banks must prioritise data management as a foundational step in their transformation journey and invest in the technology and staff training needed to achieve success.
Identify the data needed: Customer-owned banks should identify the types of data needed to make better decisions, improve service, and manage risks.
Establish data governance: Customer-owned banks should establish data governance policies and procedures to ensure data quality, consistency, and security.
Invest in technology: Customer-owned banks should invest in technology that can capture, store, and analyse data effectively. This includes data warehouses, business intelligence tools, and data analytics platforms.
Train staff: Customer-owned banks should train staff on data management best practices and how to use data analytics tools effectively.
Monitor and measure: Customer-owned banks should regularly monitor and measure the effectiveness of their data management systems to identify areas for improvement and ensure ongoing success.
One of the most common data challenges for banking transformation is the ability to achieve a single view of customer.
A single view of the customer (Golden Record) is a comprehensive, 360-degree view of each customer's interactions with a bank across all channels and touchpoints. It includes data on a customer's preferences, behaviours, transactions, and other relevant information. Having a single view of the customer is critical for customer-owned banks, and is one of the highest business stability and growth limiters from the risk of inaction.
Achieving a trusted single view of customer or golden record will:
Enhanced customer experience: With a single view of the customer, customer-owned banks can offer personalised service and tailored products and services that meet the unique needs and preferences of each customer. This can enhance the overall customer experience and build loyalty and trust.
Improved cross-selling and upselling: A single view of the customer enables customer-owned banks to identify cross-selling and upselling opportunities based on a customer's behaviour and preferences. This can help banks generate more revenue and increase customer lifetime value.
Better risk management: A single view of the customer enables customer-owned banks to better assess the risk associated with each customer, such as credit risk, operational risk, and compliance risk. This can help banks mitigate risk and reduce losses.
Increased efficiency: A single view of the customer can help customer-owned banks streamline their operations and reduce costs by eliminating duplicate data entry, automating processes, and improving decision-making.
Regulatory compliance: Customer-owned banks are subject to the same regulatory requirements as traditional banks. A single view of the customer can help banks comply with regulations, such as anti-money laundering (AML) and Know Your Customer (KYC) requirements.
Unleashing your inner digital bank relies on achieving data trust, and a confident single view of customer across your systems.
Reach out for a chat and together we can start unleashing your inner digital bank, starting with accessing trusted data.
We know banking.
Steve Bolland - Head of Banking