The financial services industry is in unchartered territory as it attempts to plot a path through the current pandemic.
Financial institutions are having to make big decisions at speed about how they operate and service customers during this challenging time, along with how they plan for a post COVID-19 world.
At least with most decision makers working from home, and outside of the busy office environment, there’s an opportunity for them to take a step back and think about improving their business practices, so they can emerge from the current crisis in a strong
Clean customer data is key
One of a financial organisation’s most valuable assets is customer data. If they have the right business practices in place to maintain and use their customer data correctly it can help them to successfully weather the current economic downturn.
While many financial institutions believe they have done enough in terms of ensuring data quality by collecting verified know your customer (KYC) and anti-money laundering (AML) compliant and clean data at the customer onboarding stage, they often don’t
factor in that data quality erodes over time. On average, customer data degrades at two per cent each month and 25 per cent over the course of a year, with people moving home, for example.
It’s only by having access to clean customer data that communications to this audience can be efficiently delivered, and the data can be effectively analysed to provide valuable customer insight. This enables those in financial services to keep existing
customers happy, so they continue to remain customers and purchase new products and services. This is important when it costs five times more to acquire a new a customer than retain an existing one.
The good news is data that is simply incorrect, such as customer name, address, email or telephone number, is an issue that can be easily fixed. To achieve this financial institutions need to go back to basics and put procedures in place to ensure customer
data is clean, which often requires only straightforward and cost-effective changes as part of their data quality regime. These practices should involve cleansing held customer data to deliver data quality in batch, and as new data is collected in real time
for a seamless customer onboarding experience. Also, make sure the service selected can enhance customer data by adding missing contact details as part of the cleaning process.
Additionally, for those financial services businesses with a global reach, it’s essential they have access to a tool that ensures country specific address formatting and standardisation, along with the collection of the correct country dialling codes. This
makes sure they can reach customers effectively worldwide, and should be used in conjunction with and ideally integrate with the data cleaning services.
Duplicate data can be a big issue. It requires the use of an advanced fuzzy matching tool to deduplicate data - merge and purge the most difficult records to produce a single customer view from fragmented and dispersed current records. This approach is particularly
important for those larger financial institutions that may have accumulated many different databases over time through acquisitions and mergers.
With the future so uncertain it’s time for smart financial organisations to take a thorough look at those things they can control and help drive business success – their business practices. They must look at the fundamental business practices that are critical
to commercial success, such as those related to their customer data – in particular its quality - and invest in those. Those that do are far more likely to emerge from the current crisis with minimal customer churn and even experience growth.