As more banks tap into customer information with sophisticated software, they’re learning that big data can serve as an excellent tool for building brand loyalty.
The Commonwealth Bank of Australia’s new mobile application, for example, offers retail customers a chance to win $50 simply by downloading the app and logging on. App highlights include a “tap and pay” feature for iPhone and Android devices, “cardless cash” for withdrawing up to $200 a day from an ATM, and a “lock, block and limit” tool for customers who have misplaced their cards.
For small business customers, CommBank has developed Albert, an interactive tablet that functions both as a secure device for electronic payments at the point of sale and as an open platform so businesses can create tailored apps that enhance the customer experience with more individualized attention.
How has CommBank – one of the Australia’s largest banks, with more than 12 million account profiles – created this digital experience that looks and feels personal to each customer? By adopting SAP HANA™, a “big data” platform that incorporates database, data processing, and application platform capabilities into a single nerve center where consumer behavior patterns get analyzed in real time.
What all these next-generation digital bells and whistles mean for customer loyalty is a better understanding of the individual attention that consumers want.
SAP’s predictive analytics allows CommBank to take action based on advanced customer behavior and insights. As noted in a September 2013 Bloomberg study on the CommBank’s use of HANA, consider a customer who searches for properties online and then goes to the CommBank Web site to research home loans. The analytical tools process the information collected and then suggest a specific product likely to appeal to that specific customer.
Moreover, for customers that have all of their household accounts (mortgage, checking, savings and credit cards) with CommBank, predictive analytics tools can suggest products and pricing that match their needs. Those customers can also take advantage of the bank’s visual and interactive online hub, Signals, which offers a report on their spending patterns.
CommBank may be a leader in offering personalized banking via big data and predictive analytics, but it isn’t the only financial institution to do so. As banks around the globe scramble to meet customers’ needs in an increasingly mobile world, they’re learning to use digital technology to retain customers.
A global survey of 111 bank executives in June 2014 conducted by The Economist Intelligence Unit and sponsored by SAP shows that banks hope to foster a sense of customer loyalty as routine online transactions are commoditized. But for now, the numbers show that bank executives don’t agree on whether mobility is a threat.
The largest percentage, 39%, predict that mobility will affect customer attrition, while 33% believe attrition will decline; 28% were not sure. Among that largest percentage, 74% are worried that switching to new providers will become easier for consumers, while 70% feared that customer churn will rise because mobile will increase commoditization; 63% believed that more new providers will crop up as barriers to market entry fall.
The same survey shows, however, that traditional banks are fighting back, with 61% of respondents predicting that banks will build customer loyalty with innovative features.
Much of that innovation will come from information management software and the power of scalability. Think Amazon: millions of customers enjoy the benefits of a cost-efficient technology that adapts to their individual needs. Banks, similarly, can reap the rewards of big-data technology by offering customers personalized service that builds loyalty.
See more customer insights on the SAP Digital Banking Hub.
