Role of Data Analytics in Improving Customer Experience in Retail Banks:

Finance is the hub of data. Every day, millions of transactions are carried out by individuals and corporates within the Nigerian banking system, which generates an infinite pool of data. Effectively capturing and understanding the quantity and complexity of this data can be used to gain competitive advantages by the most forward-thinking banks.

 

The more touchpoints a Financial Service (FS) provider has, the more data the FS provider can gather. These touchpoints could be through physical interactions with the customer, i.e. branch visits or transactions carried out via mobile applications, websites, point of sale terminals and so on. However, collecting this data is not enough, which is why analytics is essential.

 

The goals for financial institutions are to achieve profitability, adhere to regulatory requirements, while ensuring that customer experience is at the heart of its services. At least, this is what it should be.

 

Data Analytics supports FS providers to achieve these goals and ensures the business is proactive in identifying opportunities. Analytics helps Financial Institutions to know their customers, as well as their behaviours, towards determining the next best products or services for development or termination.

   

Also, data analytics provides insight into how FS providers can improve existing services by personalising customer experiences, thereby improving customer loyalty and ultimately increasing retention rate. More recently, consumers have become more demanding in terms of the experience they want from their FS providers. Currently, levels of expectation are being influenced by online retail experiences, applications by fintechs and so on.

 

For banks to further surge ahead, they will need to pay attention to customers behaviour more than they have had to. Some will do this through acquisitions, partnerships, or in-house business developments. Whatever the strategy may be, the customers will become the focus of the banks, and ultimately, the winners.

 

Imagine an online shopping experience, where short term loans are on offer from your bank. Window shopping may become a thing of the past. Of course, this will always be subject to meeting risk criteria of the banks and so on. Customers will be able to build their credit history, and banks will be able to meet customers at their various points of need. 

 

Currently, a lot of informal lending goes on in the retail space, with businesses and individuals having to play the role of banks. These businesses and individuals are paying attention to customers and meeting their needs despite providing such services at a premium when compared to banks.

 

I'll round off by saying, data generated means nothing without laying out the purpose, carefully drawing insights and developing a strategy to achieve set goals. If banks want to remain ahead, they will need to pay attention to customer behaviour, while designing their products and services with the customers at heart.