Predictive Banking Analytics are About to Change Everything

predictive banking analytics

Computers are getting better at guessing what you want. This is evident in highly targeted advertisements, Netflix recommendations, and Spotify playlists. And, love it or hate it, customers are coming to expect it from the companies they engage with — including banks.

Banking analytics are a far cry from Amazon’s at the moment. But as financial institutions are beginning to embrace innovation and pushing the digital envelope, better predictive analytics are sure to follow.

And this isn’t just good news for bank customers, it’s good news for banks too. According to this report, customers that routinely have a positive banking experience are more than three times as likely to stay with their current institution as those that do not. And as banks scramble to find ways to increase customer loyalty, predictive analytics and the experiences they foster are going to become more important than ever.

Here’s what you need to know to empower your institution with the power of predictive banking analytics:

Banks Have Really Good Data, and That’s Important

One of the cornerstones of building a system that can actively predict the needs, desires and movements of customers. And what organization has more insight into their customers than banks? From spending habits to major life events like buying a new home or car, banks have all the building blocks required to offer their clients incredibly specific recommendations.

Now what to do with this data? The idea is to know what your customers want even before they know they want it. We’ve written before about a scenario where a car loan is ready in anticipation of a customer asking for it, and it could be a reality — if banks have the right tech.

What Can Banks Do With Predictive Analytics?

Imagine a fully tailored banking experience. It’s hard to do — banks were only recently able to provide something remotely resembling a positive digital experience at all! But as the digital divide between financial institutions and traditional tech companies closes (largely in part to strategic alliances with FinTechs like Zafin) banks will be able to:

Offer Customer-Specific Banking Functionality:

If you’re a high-net worth individual, your banking requirements are going to be far different than a person who’s on a tight budget. A one-size-fits all approach is going to leave some customers wanting more.

But with banking analytics now you can create a user-specific experience based on the data you have. With knowledge of their investing and savings habits, your customers will be able to receive the exact experience they want and need, something they’d be loath to give up in a transition to a different bank.

Provide Unique Calls to Action:

Crafting a great CTA involves getting into your customers’ minds — figuratively of course. But a blanket CTA can’t possibly be as effective as one designed to appeal to an individual. Incentivizing saving is one thing: “Save your money in our high-interest TFSA!” But what if you could say “Save your money for that dream trip to Spain!” With the right banking analytics you could.

This has obvious benefits for your bank — encouraging desirable behaviour from your customers is much easier when you can appeal directly to their essential needs. But it’s also great for the customers themselves who won’t be bombarded with all marketing fluff, but instead have access to products and services designed to meet their needs.

Use Customer-specific Language

When communicating a message or offering a promotion, one-size-fits all can be very difficult. As Millennials continue to grow as a lucrative market segment, banks are scrambling to find ways to appeal to them. But doing this without alienating Boomers and Gen X is a fine balancing act.

By analyzing your customers data and leveraging available technology, you’ll be able to automatically populate language that’s customer specific, regardless of background or generational differences.

Conclusion

Your bank stands on the verge of a new frontier. Customer expectations from their banking experience have never been higher, but neither has a bank’s ability to meet them. Finding the right solution that offers the value of predictive analytics will be essential.

Ready to take the steps to creating a future-proof bank? Don’t hesitate — reach out to us today!


About Zafin

Zafin (@zafin) is a leading financial technology provider that enables banks to form richer, more personalized client relationships. Built from the ground up for financial services, its platform empowers banks to enhance revenue and operational efficiency. Founded in 2002, Zafin sits among North America’s top FinTech companies, and is trusted by retail and corporate units at some of the largest banks worldwide. Headquartered in Toronto with global offices, Zafin has a proven track record with a 100 percent client retention rate as validation.

Cam Smith

Cam is the Digital Communications and Marketing Coordinator at Zafin. With a background in journalism and a passion for blogging, Cam strives to tell compelling digital stories. At Zafin he will share the latest trends and news in the FinTech world, and share the Zafin role as leader in the industry. Follow him on Twitter @CamSmoth