Analytics is paving the way for more seamless digital engagement with customers

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

Data Analytics

Analytics is paving the way for more seamless digital engagement with customers

In early 2020, the world was stepping into the unknown territory of lockdowns and operational halts and learning new ways to function. Almost overnight, businesses had to adapt to the new digital ecosystem to ensure business continuity, and consumers who were reluctant to embrace the digital financial system were compelled to reconsider their reluctance.

The COVID-19 pandemic accelerated digital transformation for the banking and payment communities globally. Financial institutions (FIs) have had an opportunity to build trust and understanding amongst the senior citizenry and create customized products to woo the early adopters and millennials. Basis digital engagement analytics, we are witnessing new consumer habits – reduction in traditional forms of payment and increase in the usage of apps. Such change is an indicator that increasingly, even the digital-hesitant demographic has begun to make their journey into the digital ecosystem and to interact with their financial institutions online.

Leveraging Data for Meaningful Engagement

Shifting customer interactions have opened a gamut of possibilities for financial institutions. Relying heavily on analytics to decipher the magnitude of insights generated by data, several organizations are opting for tracking digital customer journeys and actions to create customer-specific experiences. This digital data can also be merged with offline data such as demographics, products owned, and so on.

The role of digital engagement analytics has become critical to furthering customer engagement as well as to creating personalized products and campaigns that are persona-specific. As consumers continue to embrace technology to manage and move their money, the onus is on financial institutions to leverage the data they already have to create seamless, intuitive, and personalized experiences to keep their customers engaged.

 The Digital Analytics Juggernaut

As consumers interact more through digital channels, the resulting influx of data has become front and center of all business strategy, new business or products. In this age of creating highly personalized products, the focus and approach of FIs has shifted from selling where the margin is high to creating products that fit their consumer’s profile.

This shift in preference and behavior leads us to another aspect of the digital journey – the customer experience. Data can be used to shape the customer experience from the time a user adopts the digital offering and completes the onboarding journey, to ongoing interactions to increase the frequency of usage, feature usage, and user retention.

During the digital journey, there are multiple examples of how new-age technologies like web digital analytics, machine learning or artificial intelligence can empower banks and FIs to segment customers across various parameters like product holdings, digital and non-digital transactions, balances, and demographic data. FIs can then apply real-time intelligence to trigger the best practices to engage and retain the users on the application or digital platform.

 The Data Red Herring

Progressing from traditionally mining data for marketing, risk management and fraud analytics, digital analytics forms the bedrock of analyzing every step of a consumer’s journey. It is now possible to collect, process and analyze information at every step of the customer interaction. For instance, the ability to profile customers who have limited or no financial transactions by using unstructured data from social interactions, geolocation, and utility payments is gaining prevalence.

[box type=”info” align=”” class=”” width=””]The ability to generate insights from users’ spending patterns and behaviors, including virtual agent interactions, requires the users’ permission. While this makes it possible to continuously enhance machine-learning-based solutions, with so much data in play the need for security also becomes more pronounced.[/box]

 Onwards and Upwards

As we step away from the uncertainty of the past two years and recover some semblance of normalcy, analytics systems that were set up for contingencies will become fundamental in providing digital intelligence and in underpinning best practices. As for digital analytics, it’s slated to permeate the financial system and will continue to create seamless user experiences for customers.

A recent IDC report highlighted that the banking industry witnessed the largest share of spending on big data and analytics in 2021 and will continue to grow at a CAGR of 13.7% till 2025. As we go ahead, application of data engineering and data science will continue to further transform the industry and become a true game-changer, across a wide range of applications in the financial ecosystem. There is a need to build a collaborative ecosystem amongst FIs, new-age fintech and the regulatory bodies to collectively work towards enhancing this system.

This article is authored by Manisha Banthia, Vice President, Data & Analytics at Fiserv


Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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