Lifecycle Managment Part 1: Attracting the Underbanked Sector
Customer lifecycle management succeeds when banks understand their customers and their customers’ most urgent needs at the right place and time. In this four-part series on lifecycle management, we will discuss how big data can help you achieve that success.
First, financial institutions can help customers by understanding which strategies work for different market segments. While upselling in the upmarket can move the needle with relative ease, scaling solutions further downmarket requires a different approach.
Attracting customers at scale
In the past, promoting checking accounts was easy. Not but a generation ago, organizations offered big cash bonuses and free merchandise, even vacations, to people in exchange for opening an account. In today’s environment, it is difficult to engage and acquire new customers in lieu of dwindling fee income opportunities.
However, having a deeper, more insightful view of consumers can help yield tremendous results for banks that know how to attract them at scale, with accounts that provide the greatest value. “It’s not about opening as many accounts as possible and simply avoiding the worst of the worst,” says Brad Jones, Retail Banking Vertical Leader at Equifax, in Customer Lifecycle Management Best Practices. “It’s about opening the right accounts and engaging households immediately.”
The right tools to find the right customers
How can financial institutions attract the right customers? The simple answer is by accessing and understanding the data that informs better decisions and helps banks optimize their customer lifecycle management strategies.
For example, Equifax’s Insight Score for Retail Banking combines payment histories from utilities, cable television, cellular data and proprietary credit sources to provide a unique risk indicator that can help uncover low-risk applicants who might otherwise be turned down for an account. Combined with Equifax’s Suspicious ID™ solution, which helps uncover fraud patterns across accounts at different businesses and financial institutions, financial organizations can better uncover creditworthy individuals in the underbanked population who could become valuable customers throughout their lifecycle.
Leveraging data simply
Smart financial institutions can more successfully expand their primary household portfolio and attract more profitable customers by taking advantage of the massive and constantly growing datasets that are available to them. However, some organizations may feel overwhelmed about how to best leverage the mass amounts of data available.
The good news is, there are resources available that can help. For example, financial institutions can take advantage of InterConnect®, a robust access and delivery channel that offers credit risk decisioning, cross-selling, segmentation, fraud mitigation, exception handling and helps with regulatory compliance in real-time. One financial institution using the power of InterConnect is on track to increase its annual incremental revenue by $14 million.
As gleaning accurate insights from big data becomes an increasingly important part of their workflows, financial institutions are likely to save more while helping drive revenue growth. The bigger question is which firms will be left behind as big data insights drive the banking industry more and more.
Read on in part two of this series to find out what banks can do to help keep newly on-boarded customers satisfied.
Image source: Wikimedia Commons
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