Big data helps the banking industry evaluate the behavioral and decision-making trends that humans make every day. This information receives assessments while it stays in databases for an extended period, allowing providers to understand the expectations, needs, and wants of prospects and customers.
This information makes it possible for the banking industry to identify trends, make changes to improve systems and enhance the customer service experience simultaneously. Big data and artificial intelligence make it possible to deliver results on time, every time.
Big Data Changes the Dynamics
There are several ways that big data changes the dynamics of the banking industry, but its most significant benefit is the simplification it provides. It filters the required information with each request to make functions smoother, identify problems faster, and initiate solutions before adverse impacts occur to the customer.
There are several additional ways that big data and AI have changed the banking industry already too.
1. It reduces turnover levels.
In 2012, about half of banking industry customers indicated that they had changed banks or were planning on doing so. The primary reason why a person leaves an institution in this industry involves a lack of support. By using big data, banks can measure consumer sentiment, identify problems faster, and provide solutions to those at-risk of leaving.
2. It streamlines the staffing model.
Two-thirds of industry expenses today are directly related to staffing. Artificial intelligence and big data can examine transaction times, traffic patterns, and customer activities to determine when employees should be available to provide assistance. Instead of paying workers for excessive downtime, this advantage can improve productivity while reducing labor costs.
3. It reduces the risk of credit scoring activities.
Banks must work to improve customer marketing while they cut their lending risks. This information exists in the credit records of each potential customer, but there are over 800 billion records currently stored by the three major credit bureaus – and millions more in other institutions. Artificial intelligence can sift through the big data to improve the scoring process to reduce the chances of taking a loss.
4. It reduces research and development costs.
The banking industry experiences staggering costs when trying to develop new products or services for their customers. Big data provides an opportunity to use transactional data, including the duration of a teller transaction, to discover potential problematic gaps in coverage. With this information available, the industry can work to create solutions that work to enhance the consumer experience.
5. It changes the customer journey.
The typical customer in the banking industry today faces dozens of different paths that could take them to a lending product or financial solution. There are call centers, local branches, and websites that all deliver access to needed products or services in unpredictable ways. Big data and AI can track habits, encourage specific practices, and funnel each consumer toward their optimized journey.
Big data and artificial intelligence take the analytics collected by the banking industry to deliver information that can lead to new policies, procedures, and outcomes. When there is a greater understanding of what the customer requires, then this tech investment creates the potential for impressive profits.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.