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(Concluding part of the 2-part blog on improving customer lifecycle management in banks)
‘Well begun is half done’ – Aristotle
In the previous blog, we saw how financial institutions can initiate a streamlined CDD-led customer onboarding experience. Let us now look at what does it take to manage what lies ahead.
By thinking more strategically about the customer lifecycle journey – from targeting to the acquisition, to servicing and developing – and making smarter use of advanced data, analytics and with some help from technology, financial institutions can diligently improve customer experience and reduce attrition.
Most financial institutions are already interpreting the customer’s internet banking and mobile banking behavior in order to provide more hyper-personalized services. Leveraging customer transactions and interactions in real-time help banks make precise ‘segment of one’ cross/upsell recommendations.
To build better relationships, certain financial institutions are also sourcing alternative data, for e.g. customer payment histories for mobile phones, utilities, even cable TV. This data augments traditional credit data with more dimensions to spend behaviors.
When combined with credit data, alternative data can also be a good indicator of the risk potential of customers. In most cases, a reliable risk score for retail banking can be successful in determining account risk. The score can also help identify applicants that might otherwise be turned down, but who have low risk, based on their payment history from alternative data.
By viewing risk scoring from fraud prevention perspective, financial institutions can go beyond assessing the viability of new customers and begin addressing dormant or evolving fraud such as ATOs and bust-outs (where seemingly good customers max out available credit before vanishing). Specialized financial crime risk management solutions help identify suspicious activities and potential fraud patterns that are at play in other institutions, and delivers that information in real-time.
These solutions also help financial institutions maximize revenue and margin at every step along the customer lifecycle, from acquisition to upsell/cross-sell to loyalty/retention to debt management – all while maintaining continuous and stringent due diligence.
A good CLM enabling solution will help continuously analyze customer behaviors and needs, determine the right objectives (acquisition or retention), and identify ideal ways of targeting them. Specifically, a good solution should –
More importantly, it helps financial institutions enhance the four key CLM priorities:
From acquiring to onboarding to strengthening relationships to growing up/cross-sell revenues, while complying with regulatory norms, a sustained, superlative and diligent CLM helps FIs traverse an exciting journey that is not just begun well but also advanced well.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Eimear Oconnor COO at Form3 Financial Cloud
07 November
Karla Booe Chief Compliance Officer at Zeta Services Inc.
Kyrylo Reitor Chief Marketing Officer at International Fintech Business
06 November
Konstantin Rabin Head of Marketing at Kontomatik
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