Tapping customer data to drive growth: A South African Perspective
As banks across Africa start to roll out increasingly sophisticated digital channels and systems, many are starting to explore how they might use their increasing wealth of data to create sustainable growth and improve efficiency. Rightfully so: banks around the world are already finding increasingly valuable ways to apply analytics across their organizations and – in doing so – are creating unique competitive advantages.
Focus on the customer
Our experience suggests that many banks may be missing significant growth opportunities that could be achieved by consolidating all of the different ‘nuggets’ of customer data at their disposal to create tangible and actionable insights about their customers.
Customer analytics can drive significant benefits for Africa’s banks. A well embedded customer analytics capability could, for example, enable the bank to target the right customers during marketing campaigns, maximize cross/up sell opportunities, improve customer satisfaction and reduce churn and fraud cases.
Many banks are also starting to leverage customer analytics to identify who their most valuable customers are, how they behave and how best to retain them and attract others. It is allowing for the provision of real-time, individualized service at every stage of customer interaction: marketing, acquisition, cross-sell, service, and retention.
The more sophisticated banks are now starting to apply ‘predictive analytics’ approaches to their customer data to capture more forward-looking insights that go beyond analyzing events that happened in the past to instead start to predict what events will happen next and, in doing so, better inform their decision-making.
The battle for the customer
Recent research by KPMG International suggests that few banks around the world fully understand the value that data and analytics can provide in terms of customer insights and richer customer experiences. Unfortunately for the banking sector, there are organizations like Google and Facebook that do understand the value of customer insights and they are keen to use this knowledge to create new banking propositions that deliver exceptional customer experiences. Both organizations have already launched successful money remittance services, largely by creating an unprecedented view of customer preferences by aggregating search, social media and financial transaction data.
Simply put, customer insights are driving the next wave of competitive advantage and banks will therefore need to go beyond merely understanding the needs of their customer across the various touchpoints to ensure they can also anticipate and rapidly respond to those needs.
Building the customer view
One of the key issues most organizations face in the implementation of a customer analytics strategy is the deployment of the right solutions to accurately analyse and interpret data. Integrating data technology into existing systems and business models is not an easy task. Most banks are saddled with complex, product-centric legacy systems and ‘siloed’ data and are simply not capable of achieving a ‘single view’ of the customer across all products and geographies. Furthermore, the poor integration of multiple systems and the complexity of data structures within banks has impacted the quality and integrity of the customer data that exists.
We believe that – to effectively manage and analyse customer data – Africa’s banks will need to:
- Build a long term data strategy that is deeply rooted in the long term business and customer strategy goals of the bank. The data strategy should support specific business outcomes and focus on finding the data required to reach the goals.
- Get the right high-quality data to the business in a fast, flexible manner. Business and IT must work closely together to develop processes that enforce the capture of quality customer data upfront and not as an after-thought.
- Develop systems and capabilities that aggregate data across business lines to create a single view of the customer.
- Overcome internal obstacles by managing, measuring, and compensating employees based on how well they use relevant data to make business decisions and drive business outcomes.
While the digitization of banks and the availability of sophisticated analytics tools has now made it possible for banks to gain unique and valuable customer insights, banking executives will need to think carefully about what capabilities, culture and infrastructure they will need to move from data to analytics to value.
To start, Africa’s banks could be taking a number of immediate steps to capture greater value from their customer data – from identifying customer data gaps and building a ‘single view’ of the customer through to improving the quality of data and creating centralized Centers of Excellence for customer analytics that cut across Marketing, IT and Finance.
Please download the 2016 Africa Banking Industry Customer Satisfaction Survey
For more information
KPMG in South Africa