Blog article
See all stories »

Do banks really know their customers ?

Background

The other day I was shopping on Amazon and Flipkart online. I chose a mobile to buy and on the same page, another section came up which had information displayed for a mobile cover and a screen protector for that mobile. The site also created a combo deal of all 3 items (mobile, cover and protector) and gave the total amount which needs to be paid for it. This experience got me thinking that how strong the data analysis of the shopping site is that it is able to predict that when a person shops for a mobile, he will generally shop for a cover and screen guard as well. This bundling of the services/products, not just gives a good experience to the customer but additional business to the company as well by cross selling products.

Another classic example is that when we plan for a holiday and if try booking a flight from some travel site, immediately it will predict and propose hotels/cab services for the chosen destination.

Once you have done shopping from these sites, based on the data they have available about you, they send promotional communication through mails/messages etc. These communications are not just generic but specific as well based on your search and purchase history. This makes the shopping experience very smooth and pleasant for the customer.

IF we extrapolate this scenario to banks, we need to ask whether the Banks are doing sufficient for the customers. Based on the data they have about the customer and their banking history, do the banks really know their customers to be able to provide good products and services with the best customer experience.

Where the banks are missing it

They wait for the customer to come and apply for products and services.

Most of the follow-up with customers is through cold calls and generic promotional communication.

Proper customer data analytics is not done and needs and requirements not predicted.

Customized service is still in infancy and restricted to premium customers.

 

To know the customer really

If a bank really wants to feel a part of customer life, then it needs to make customers a part of its life. They should aim:

To predict customer's next spend – If the customer has used his credit card/net banking for air ticket booking, immediately, he should be approached for using banking services for insurance, hotel booking, suggesting the nearest branches, ATMs in his destination place.

To predict his next money needs and be there before he actually needs it like post marriage, home setup loans, education loans, vacation loans, saving based on promotions or job change, business extension products etc. To be able to offer these products, banks should be in touch with customers and understand at what stage of life they are in and what their needs are at that stage.

Come up with customized products by having tie ups with various e-commerce to provide other benefits and services. Predict the need to services, like half annual service of cars, repair of house etc.

Customer should be felt cared about and ensured that as a Bank, we understand what they want. That will be the actual 'know your customers' for the bank. 

13903

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 September, 2017, 18:01Be the first to give this comment the thumbs up 0 likes

Knowing and doing are two different things, especially when it comes to a sensitive area like retail banking. Banks Will Know Chipotle Is Going Bankrupt Before Chipotle.

In any case, when I use my credit card for air ticket booking, I do get approached for travel insurance and hotel booking. Just that my OTA does this. Ditto in your Amazon example. If I buy these products, I use the same credit card. The bank earns extra interchange revenue. What difference does it make to me or the bank as to who initiates the Next Best Offer? OTOH, I'd think the bank is being very smart by leaving the OTA to do all the heavy lifting of crunching the data and stepping in only to pocket the revenues. 

Not surprisingly, banking is the most profitable sector and Ecommerce is the least profitable sector in FORTUNE 500.

Shyam Khandelwal

Shyam Khandelwal

Business Analyst

HSBC

Member since

23 Jun 2015

Location

Hyderabad

Blog posts

5

This post is from a series of posts in the group:

Futuristic Banking

Stuff that's out there in the way out and beyond in banking.


See all