The pandemic brought about many digital-first innovations. It has accelerated omnichannel adoption — blending physical and digital commerce channels — as consumers quickly adopt digital-first interactions. Many of our customers now expect that we have digital-first offerings, which has brought immense pressure on banking and telco. This pressure mainly comes from digital-first and -native companies that have grown significantly in recent years where the pandemic functioned as a flywheel. So, the traditional banks and telecom companies have been making baby steps towards a customer-centric approach. You could consider them large vessels; as recent history tells us, they are hard to change course.
Banking and telcos are under pressure when leveraging customer data, but sometimes in different ways.
Why banks need to leverage customer data
The push of neo-banks to put the customer first
Neobanks are simple and flexible and offer the low-cost products and services the customer wants. Unlike traditional banks, they strongly focus on the customer journey and experience, and they innovate by often un- and re-bundling conventional banking products to improve their product offerings.
By understanding customer needs, speeding up the time to market, and staying focused on their core value proposition, neobanks can easily control the end-customer experience.
Maximizing customer lifetime value
Customers focus less on specific brands but on finding the right features and services that work for them.
Most traditional banks are moving towards a personalized digital approach, and accurate customer analytics accelerates this process. By leveraging customer analytics, banks can personalize their services to suit the customer’s needs as it provides real-time, accurate inputs.
Data-driven marketing for proactive engagements
Everyone is digital, especially your customers, and that’s where you need to be. Instead of waiting for them to contact you, you must reach out to them, build relationships, and educate them. You can do this by sharing relevant content and your expertise as part of a solution to their challenges.
Customers want (and expect) highly targeted messages, which one can only achieve through a data-driven marketing strategy. It’s about being proactive in the way you help your customers, who use a wide range of channels to seek out support.
Regional differences: EMEA versus APAC
You can find this continuous tension between neobanks and traditional banks everywhere, and how they deal with this is similar across regions. The difference lies in the offering: Europe is evolving towards ‘marketplaces’ where banks try staying top-of-mind by offering much more than ‘only bank’ products. Which, of course, is accompanied by an even bigger need for data-driven insights. Because now, you not only have to understand their “financial services and product needs” but also way broader the likes (e.g., car lovers, frequent flyers) and interests (e.g., foodies, tech early adopters, poetry).
In Asia, banks like DBS position themselves as a partner in life, compared to the traditional banks who compete for transactions – lowest rates, best deals, and offers.
Tech-savvy telecoms also have their challenges
We see similar opportunities in the telecommunications industry as they’re also sitting on a lot of data.
The sector is known for its many acquisitions to have a complete offering with mobile (data), telephony, internet, and media (quadruple play). The companies evolve, gather data, but they can’t reach that data as it’s all stored in scattered (product) silos. If data is not centralized, you cannot deduct valuable and monetizable insights.
Telecoms need to step up their game to unlock the value of data by, among others, getting rid of the silos, reorganizing their structure based on the customer instead of product- or flow-based, and obtaining an end-to-end view on all touchpoints a consumer has with a brand.
Differences between banks and telecoms
There are some significant differences between banks and telecoms as they’re all going through that process of maturing, with creating a unified customer view as the first step.
Banks have had more of a kickstart when it comes to customer data, and the quality is usually better as they have built up a longstanding relationship with their customers. Secondly, they often need official data related to products with a legal impact – e.g., pension savings – so they have a certain level of data quality pulled straight from the source. And finally, historically, they are trusted by their customers, with the bank clerk being highly respected in the community.
With such customer knowledge, banks can better predict their customers’ needs and serve them on another level.
Both sectors, however, can benefit from using a customer data platform (CDP) to bring all that data together and act upon it. When it comes to MarTech, banks are often seen as risk-averse, while telecoms are the ‘innovative ones.’ The beauty of such a platform is that it appeals to both types.
On the one hand, CDPs bring all data together in a centralized location, allowing a single source of truth of the customer. So, when it comes to customer data, privacy and regulatory constraints can be managed in this central location. On the other hand, because all data sits together in the CDP, it allows the creation of new insights by combining data points from different sources and making calculations, revealing new insights. This information can be used for innovative use cases on a personal level.
Create a competitive advantage with a CDP
With the proper CDP in place, banks can:
1) understand when to market and what they need to promote for the individual customer. They can then coordinate the campaigns with what the customer needs according to their journey or buying stage.
2) enhance the overall customer experience with rich customer insights from across channels and transactions, steered by the right marketing strategy.
3) reduce risks by making decisions for risk acceptance based on individual data points and considering scoring on financial health indicators—for example, loan refunds or credit card debts.
Therefore, banks must prioritize improving and digitizing the customer experience and investing in getting an intelligent CDP. The right digital strategy with the right platform can strengthen the bank’s resilience and help serve customers when needed. Meeting customers at the right time and in the right place with personalized recommendations can, for instance, decrease the everyday stress around financial matters and encourage users to trust the process and engage with the website or app.
Singaporean bank DBS invested heavily in all things digital and was well prepared for the sharp rise in demand for digital banking services during the COVID-19 crisis, becoming globally recognized as the best bank in 2020. Another noteworthy success of DBS is their DBS NAV Planner, which allows their customers to – among other features – receive real-time market prices to ensure their investments and to retrieve their financial information monthly, thus adding value for the customers instead of only sharing product information.
Time to go beyond tradition
Think of how your customer is connected to you and how to build that relationship instead. It’s not necessarily about selling the product anymore, but about sharing insights with their customers, taking up a trusted adviser’s role.
‘Start to invest’-services
Low-threshold investments are a good example. We don’t just lower the ‘hurdle’ by offering lower investment amounts; we also make the portfolio as relatable as possible. Minimizing the unknown aspects is vital and is doable if you know your customer.
Services beyond banking
And this also goes for the new trend regarding marketplaces. Banks try to stay top-of-mind by offering more than only financial products and services. But avoid offering bus tickets to someone working from home or with a company car.
It’s more about households’ complexity for telecoms. They want to be relevant for every individual by what and how they offer their products and by distinguishing between the various devices used. It gets even more complex when considering who the actual decision-maker of the household is. This requires a lot of valuable customer data and intelligence.
Go further with an Intelligent Engagement Platform
The right tech is critical to achieving these use cases. Traditional marketing suites tend to fail at this, are mainly focused on execution, and don’t know how to handle data. So, new tech solutions, such as a CDP, are needed to manage data.
Managing customer data is one of the biggest challenges all companies face; that’s why a CDP is designed to solve the typical problems of integration, labeling, and customer data storage. Next to that, CDPs allow businesses to have a unified view of all customer data interactions, thus granting more information to develop and execute strategies.
NGDATA’s Intelligent Engagement Platform (IEP) goes beyond standard CDP functionality. It’s intelligent because the IEP adds real-time decision-making through AI and omnichannel orchestration. It has in-built analytics to provide true 1-to-1 personalization across the customer lifecycle. Our Customer DNA empowers you to produce the most insightful customer experiences. With real-time interaction management, marketers can engage with their customers in the channels they prefer with the most relevant messages.
Reduced contact center calls while improving customer service
An electric utility client needed help reducing the peak pressure moments on their contact center. Throughout the year, the company charges customers monthly advanced payments. At the end of the year, they calculate each customer’s actual energy consumption. Some will be charged extra; some will get the surplus back. The company’s call center was being contacted a lot more frequently around that time, causing costs to go through the roof and negatively impacting customer satisfaction.
A machine learning model calculated a predictive score to estimate if a customer would call. This CDP metric allowed us to proactively contact these customers before receiving the yearly bill, thus anticipating their questions and calls. By answering their questions before asking them, we significantly lowered the pressure on the contact center and kept agents available for other service requests.
How to start with use cases
Start with the basics.
Don’t overthink about these futuristic use cases. Start with the basics and grow from there: Who is your customer, and how can you serve them? Allow yourself and your teams to get used to this new data-driven communication and mature with the platform and your infrastructure. Start small with one use case, measure the results, and you can replicate, repackage, and re-bundle for other product lines.
Partner with your tech vendor.
Once you get started, you’ll see it’s not as complex as it seems. Companies focused on customer relationships like banks and telecoms must learn to build products and services around a personalized, behavioral-based, journey-based view of their customers – essentially giving them what, when, and how they want it.
You should be able to rely on your CDP vendor’s industry expertise and the lessons learned from their customers.
Customer engagement cannot always be about new sales. The best way to engage your customers is to develop an experience based on their customer journey. Find out what your customers care about and design meaningful communications across all your online channels that mirror how you would build a relationship with a customer in person. Think of future use cases and then build towards them.