At a time when it’s easier to switch than ever before, single customer view is a powerful retention and capture tool in the fight for market share, according to Sandstone Technology Chief Customer Office Ross Watts.
There are two main battlegrounds for banks generally, says Watts. The first is achieving ‘main financial institution’ status with a customer, meaning that the bank holds the customer’s main transaction account. And the second is the home loan.
“A single customer view enables you - as a bank that enjoys a relationship with your customer, to have a better chance of retaining, and capturing one or both of those things,” states Watts.
Mr Watts defines single customer view as having a “holistic, aggregated view of all of the product holdings that a customer has”, including all the different product types, transactions and interactions they have with their financial institutions as a result of those product holdings. From bank accounts, to customer service calls and complaints.
According to Watts, “it’s about understanding customers in context so you can engage them in more timely and effective ways.”
And this single view is even more crucial in 2021. It’s never been easier for customers to switch accounts, to spread accounts between providers, or to move their mortgage or transaction account. And new digital solutions in banking are helping to facilitate that.
A new era of easy switching, open banking and fintech innovation
Open banking is having a tremendous impact in financial services, making it easier for customers to give their provider access to their information, particularly transactional information. Alongside open banking there is a new breed of accounting integration being introduced through fintech innovation, making it easier for customers who have transactional data in other areas - say in MYOB or Sage - to extract that and feed it into their digital banking app easily.
The result is that fintech innovation is making open banking more attractive to institutions.
“When the concept of open banking was first introduced, it was all about giving banks the right to access the data. Now banks are thinking about what they can do with that data, and how can they pull other sources into their existing pool of transactional data,” Watts says.
Customer power on the rise
This new world of banking technology that Watts describes has further raised customer expectations. “If I’m a customer, I expect my bank to provide consistent experiences across touch points, and prove to me that they know me,” he says. “Customers increasingly won’t tolerate having to input information that their banks already have.”
To keep customers happy, banks need to provide real-time decisioning, the best price in the quickest possible time and limit the amount of inputs that a customer has to make.
“If a customer’s having to spend more than 30 seconds on a digital banking screen to input information, they don’t bother, they will just move on,” Watts says. “You really have to be able to have data available to infill information gaps in the application process.”
Single customer view makes it easier to retain customers, including those valuable main financial clients. It allows you to evidence to customers that you know them better than anyone else, and that there are real benefits to them staying with you.
As Watts says, “You can see from the many rewards systems offered to customers, from attractive interest rates on deposits to partner incentive schemes, that financial institutions are always looking for ways to keep customers. And single customer view adds real value here.”
Benefits for targeting, risk and behavioural analytics
Single customer view also opens up a world of opportunity for marketing and seamless customer engagement.
Within Sandstone’s own digital banking offering as an example, there are powerful marketing extensions, whether that be in-app or push notifications via SMS. For campaign management, it’s extremely valuable to be able to segment customer data, target customers and look at what a next best offer might be; also being able to predict their financial management behaviour.
Single customer view is useful in pricing, enabling a bank to very quickly establish which customers need to be offered a better price to retain them. Watts cites CBA as a great example of a bank using data for retention and retaining strong market share through dynamic pricing.
“Any time a customer looks like they’re likely to leave them, the bank is aware, through customer data, and then makes sure to offer good rates,” he says. Fintechs are particularly active in this behavioural analytics space, using data to predict whether a customer is looking to refinance, Watts says. He gives an example of one fintech that uses spending information linked to a customer’s digital banking app, to establish whether they’re on the market. They can establish that a customer is saving in a different way, sending money somewhere else, or reducing their credit card limits - the behavioural signs of someone who might potentially go elsewhere.
Another place where that behavioural analytics approach can help banks - and society, is with financial hardship. Until now, banks have focused on customers reporting financial hardship in times of economic instability. In the future, banks could use single customer view to establish whether someone is in a deteriorating financial situation, whether they might need help, ahead of them ringing a hardship line. When you think of how COVID has affected our communities, that kind of insight is good for business risk, and life-changing for citizens.
While there are obstacles to achieving this single customer view, banks have recognised its power to capture customers from competitors and keep existing customers engaged and satisfied. “And with the technological advancements we see in the market, it’s never been easier to gain that view,” Watts says.
