How Banks can Exploit Big Data to Engage with Millennials
Millennials are slowly moving into their prime spending years and when it comes to spending/saving/managing and using the money, especially the banking industry is in need of reshaping its services, solutions and how they do business according to this large generational group’s expectations. And where do they start?- of course from utilizing Big Data!
Millennials have already proven that they are one of the most powerful and influential demographics – and they are getting even more important for the industries since they are expected to overtake Babyboomers in 2019. Even though millennials are classified as one demographic segment between the ages 18 to 40; it requires an unusual way of approach for organizations to engage with this tech-savvy, (and high maintenance!) demographic. Since their reactions and interactions are quite different from any other segments, you can say goodbye to traditional approaches, services or products. Well, it is not easy to influence the influencers!
Millennials are slowly moving into their prime spending years and when it comes to spending/saving/managing and using the money, especially the banking industry is in need of reshaping its services, solutions and how they do business according to this large generational group’s expectations. And where do they start?- of course from utilizing Big Data!
Banks Need to Understand Big Data to Achieve Digital Transformation
Luckily, millennials tend to generate big data, and they usually do it from digital touchpoints. This makes it easier for banks to collect, understand, analyse and act on valuable data. However, having big data isn’t a cool asset anymore unless you generate insights and know how to utilise big data.
1. Building Detailed Customer Profiles via Advanced Data Analytics
Banks were able to attract the previous generations with traditional offers, loans or services, and face-to-face communications used to work to convince these customers or sell a service/product etc. However, since the millennials are not easily engaged with the financial institutions and their visit rate to their bank branches are the lowest compared to other demographics; the only way to catch their attention lies on personalisation through digital transformation.
This is where Big Data Analytics come into the picture. Through Big Data Analytics techniques, banks can analyse customers’ demographical data, lifestyle data, preferences, patterns and behavioural data as well as their location data in order to build personalised offers to meet their expectations. Moreover via predictive analysis banks can create automatic alerts based on customer patterns and act on them real-time, or even before some problems occur. Via business analytics, banks can also extend digitalisation beyond customer experience and apply it to non-customer-facing operations.
So basically, shifting focus from the “product” to the “customer” became inevitable especially for the Banking industry. In order to meet, or predict the expectations of millennials’ needs; banks need to build detailed customer profiles by utilising Big Data Analytics. This way, banks will be able to uncover trends in their data, provide better insights and make their data meaningful for their future marketing activities, which we will talk about next…
2. Utilising Customer Insights for Better Engagement
One of the most significant behavioural characteristics of millennials is low brand loyalty. This independent generation isn’t so loyal about anything unless they really benefit from a service/product/solution – well, at least they are quite generous when it comes to sharing information in order to be served more efficiently. Moreover, one slightly bad experience can make it very difficult to win back a millennial.
How can banks carry personalisation to the next level through big data?
This lack of loyalty and diminutive attention span challenges banks to build sustainable engagement with millennials and this can be done only via personalisation. In order to achieve this, after the analysis process; banks need to discover hidden patterns or trends on their complex data via Data Visualization, that will add a cherry on top of their personalised approach efforts.
For example, banks can leverage their segmentation and targeting strategies by creating advanced behavioural segments. Unlike traditional segmenting using static data such as age, gender and location; big data technologies enable banks to track their customers’ behavioural patterns (via integrating all channels and tracking website actions, customer e-mails, user forums, call centre etc.) and act on them simultaneously, or even before they occur.
What can be offered?
Providing a fast service or enabling customers to transfer money via mobile aren’t “wow factors” for millennials. So far we have talked about having valuable data, and let’s assume it is processed, analysed and visualised wisely by banks to build unique customer profiles. What is next?
Banks need to think outside the box. By integrating big data analysis into digital marketing and engagement tools, they can; a) easily identify if a customer is about to leave by tracking similar patterns of other customers who already cancelled their accounts; and b) take immediate automated marketing actions such as offering a tailored made promotion or a solution. Banks can also be one step ahead in this scenario by predicting failure points for future strategies and take actions even before a problem occurs.
Capturing millennials’ attention also depends on the exciting, unique and “cool” experiences. Through Big Data Analysis, banks can detect the most common problems that customers face or detect the most asked questions (via call centres, FAQs, customer behaviours) and let robo-advisors provide a 24/7 service to our millennials who always expect quick responses.
Also, like simplifying their customers’ shopping experiences with 3rd party collaborations, banks can also create some interesting services with customer benefits with other parties, in order to increase customer engagement. For instance, Emirates NBD created an app that provides the bank users with higher interest rates based on their physical activities, tracked through either Apple Watches or other Apple Health fitness tracker apps. In addition to simultaneously tracking their progress through their Apple Watches and iPhone applications; customers can also get free insurance covers and enjoy ‘money off’ vouchers provided by Emirates NBD partner networks, and enter prize draws. And clearly losing weight while earning money is a great way to excite the fitness freak millennials.
Conclusion
As a result of recent technological developments, trends and in line with the high expectations, the banking industry clearly has to adapt itself to digitalization in order to engage with the millennials. Banks should use valuable data wisely in order to offer their customers innovative, more relevant and personalised services and campaigns throughout their whole journey. In order for banks to take the right actions, they need to have an integrated solution covering data analysis, data interpretation and a smart marketing platform able to take immediate and automated actions.
Original Article