Our new report looks at the profound impact of data analytics on how financial institutions service their customers. But the pace and intensity of technological change has caught many incumbents by surprise, creating a gap that is being exploited by new entrants. Access to data and the ability to effectively manage analytics will decide which financial institutions will prosper and which will be supplanted during this wave of transformation.
Download Analyse This, Predict That and:
- Identify the major forces shaping digital competition and growth
- Find out how new players are using data to disrupt the financial services market
- Learn how data Analytics based experiences can alter consumer perceptions of customer experience
- Discover the technological considerations critical to compete in a data driven business environment
HOW FINANCIAL INSTITUTIONS COMPETE AND WIN WITH DATA ANALYTICS
Digital has changed how customers expect to engage financial services.VIEW THE INFOGRAPHIC
The intensity of competition has increased exponentially. This is only likely to accelerate as the twin mega trends of digital proliferation and inter-generational wealth transfer make traditional financial services markets increasingly attractive for new entrants.
Generations X and Y are the key target market for disruptive innovations enabled by data analytics. Today, these generations are responsible for more than half of all spending and borrowing in Australia.
Personalisation, Network Effects, Cloud Business Models and Open Source Technologies are the forces that are defining where and whether new companies enter the market, and whether traditional players adapt or are out competed.
There is a major gap between the priority incumbents place upon analytical capability, and their ability to compete today. New entrants are already exploiting this weakness, so incumbents are increasingly seeking to close the gap through major investments in capability.
Analytics-enabled financial products and experiences can radically alter consumer perceptions and behaviour, and can support customer acquisition, engagement and retention strategies - whether executed through a branch, contact centre or digital channel.
Each of the five analytics-enabled concepts we tested appealed “highly” to consumers in Australia, Singapore, Malaysia, Indonesia and Hong Kong. Each concept was perceived positively across the nine “experience” metrics tested. This means that either incumbents or new entrants have the ability to compete and win on the basis of analytics-driven services.
Rocky Scopelliti is Telstra’s thought leader and industry expert in the banking, finance and insurance industry. Rocky has more than 20 years of senior management experience in the IT and financial services sectors covering product development, strategy and planning, business development, research and strategic marketing.
Over the past 6 years, Rocky has authored a number of thought leadership research reports covering retail banking, business banking, insurance and wealth management. Educated in Australia and trained in the USA, he has a Graduate Diploma in Corporate Management and an MBA. He is also a graduate and member of the Australian Institute of Company Directors (AICD).
As these concepts depend on large-scale analytics, it is now becoming clear that modern financial services providers need to have well-developed analytical and information gathering capabilities. Generations X and Y are seeking offerings beyond traditional financial services products and are prepared to look beyond traditional providers to fulfil these needs.
A limited window of opportunity exists for incumbents to close the capability gap and exploit their existing advantages, namely their unique position of trust, strong customer relationships with Gen Y and X and multiple touch points.
By embracing an analytics-driven approach, it is possible to deliver many exciting new customer experiences, three examples of which are discussed in the report:
- Contact.Me: Allows customers to access the combined capabilities of an intelligent personalised, virtual financial assistant with a real (but remote) relationship manager through a single, engaging and consistent interface.
- Branch.Me: On entering the branch, the customer is digitally identified and their needs / preferred way of communicating determined. The institution then provides the customer with personally optimised content, delivered in the way they most value – whether by branch staff, digitally or a combination.
- Digital.Me: Shows how providers can combine analysis of saving, spending, borrowing and investing behaviours with social analytics and broader market analytics to create online and mobile tools that help customers more effectively manage and use financial services.
Any analytics-driven services must be underpinned by secure and scalable data storage connected to a specialised analytics platforms (often hosted on high-performance cloud platforms) by high-speed, low-latency networks.
For all players in the market, entering into analytics needs to be done so safely and in a way that respects the customer’s privacy, enhances trust, and delivers greater value.