Big Data can help financial institutions adapt their digital banking strategy during economic volatility

In the past few years, many factors have impacted the financial sector, whether it was the health crisis, geo-political conflicts, or inflation. This led financial institutions to change their goals and trajectory when it comes to their digital banking strategy, as the needs of their customers changed due to these circumstances.

Banks and credit unions need to adapt their digital banking strategy during economic volatility to provide the best customer service with the help of Big Data. 

Indeed, Big data is changing the way financial institutions operate. Banks and credit unions can now adapt their product, services, and marketing strategy by analyzing large amounts of data in a short period of time and gaining very insightful information. 

Financial organizations that can leverage the power of data will be in a better position to provide their clients with more innovative services and goods.

How banks and credit unions can use Big Data to improve customer experience

Old-fashioned segmentation, in which demography, age, and gender were used as statistics for segmentation, no longer works today. Nowadays banks and credit unions must segment each of their clients into single individual cases. In order to do that financial institutions need to use Big Data.

In this new era, it is crucial for banks and credit unions to start using data in new ways to better understand their customers’ needs and to create new customer engagement techniques. Big and open data creates new and interesting possibilities for customer service by increasing turnaround time (TAT) and delivering personalized service.

Technology and data open up new frontiers for banks to improve customer service.

- Sam Kumar, Global Head of Analytics at Standard Chartered Bank, BBC

Financial institutions can use big data to segment customers based on their profiles and preferences and enhance customer service performance based on feedback. Banks and credit unions can also learn which modes of communication a customer favors. Younger customers are more comfortable with digital banking, which includes the speed and simplicity of mobile banking apps backed up by customized service. 

One client might prefer smartphone alerts, while another might prefer emails or even traditional print mail. And it is the banks and credit unions that must adapt to their client's preferences.

The key benefits of Big Data for financial entities

• Personalized and targeted marketing for each individual customer.
• Recognize clients' primary methods of payments, such as credit/debit card purchases and ATM withdrawals and see clients' purchasing trends.
• Improving customer experience with smooth onboarding and seamless transition from one device to another.
• Fast data processing with simplified monitoring and evaluation of the vast amounts of customer data which include personal and security information.
• New methods of authentication with biometrics 
• Accurate Fraud Detection of odd transactions and suspicious activity.

However, Big Data is only useful to banks and credit unions if they know how to analyze and use the information properly. This remains one of the main struggles for financial institutions: drive insights from customers’ data and develop personalized experiences.

Build a tailored financial journey for the client

Experts say that it is critical to comprehend the client's data in context to optimize it into converting opportunities. Hence, the first step in creating a customized experience for consumers is to analyze large chunks of data.