Don’t underestimate the value of big data, says new Oracle and Efma study 17 November 2016
A whitepaper from Oracle and Efma published today highlights the importance of using customer information and big data effectively if banks want to better understand their customers’ individual needs and thrive in the ‘Age of the Individual’.
Responding to change: How are banks using information and pricing strategies to boost profitability? reports on the recent findings from a survey of senior executives from financial institutions across the globe carried out by Oracle and Efma, which looked at the different types of information banks are collecting and using in order to gain a 360-degree view of their customers. It also explores how they are analysing this information and what big data strategies they have in place.
According to the whitepaper, banks are making some progress towards harnessing information from different sources to enhance the customer experience and to boost their overall profitability, but they still have a long way to go.
For instance, many banks admit that they still don’t have a full view of their customers across their organisation. In most cases this means that someone might be a customer of the bank across many different divisions; but one division might not recognise that they are also a customer of a different part of the bank. Even fewer banks – only 20% – are collating information from outside sources such as social media to gain a 360-degree view of their customers.
In the area of big data, many banks are also still in the planning stages. “There is perhaps a reluctance to forge ahead due partly to costs and also due to the difficulty of knowing which data to use and how to use it effectively,” said the whitepaper.
But there are measures banks can take to get on track and better understand their customers’ needs, which are detailed in the whitepaper. Areas covered include gathering and analysing information, big data strategies and relationship-based pricing. The whitepaper also highlights how certain strategies are being put into practice in various different regions worldwide.
“Information is the lifeblood of financial institutions,” said the whitepaper. “Banks are in the privileged position of having access to a huge volume of data relating to their customers. How this is used can make a big difference to the customer experience – and ultimately to the profitability of the bank. The right information, analysed in the right way, can ensure that the bank can provide the right offer at the right time – along with a seamless service at a lower cost. And that has to be good for everyone involved.”
Download the Study