Building A Data-Driven Culture the Right Way: Five Lessons to Build Better Relationships

The crucial front in the battle between big banks and community financial institutions has shifted from the physical world to the digital one. The big banks have far more resources. To defeat them, community financial institutions need to use data to drive more timely, respectful, and frequent customer communication.

To combat this challenge, these institutions should take on their competitors with an innovative, omnichannel approach. This digital-first, data-driven approach can provide a customized banking experience that delivers consistent messages across all channels. All while going beyond the typical approach of initial account setup and cross-selling programs – and instead truly engaging customers and members in a relevant way that drives higher engagement rates and more account openings.

“Having a lot of data is not the goal. The goal is to collect, collate, manage, process and deploy data that provides a unified and accurate view of the customer in a way that all parts of the organization can use,” according to a recent article. As financial institutions quickly approach the half-way mark of this year, it’s time to consider some critical data-driven strategies to better serve modern consumers.

Tedious Account Applications v. Customer Convenience

Not surprisingly, the percentage of institutions that offer online and mobile checking accounts soared in 2020. In fact, recent reports explain that online and website account opening reached 82 percent and mobile account opening soared to almost 40 percent. Although adding digital applications can be a great move for banks and credit unions, many still have lengthy application processes and high abandonment rates.

To avoid this, institutions should utilize the ease and convenience of online applications while keeping the consumer in mind by creating an application that takes as little as ten minutes or to complete. This process should be supported by the help of tools that help create and manage targeted communications for those customers or members with unfinished applications. Plus, innovative tools can provide an easy way for returning applicants to resume the process.

The Waiting Game v. A Warm Welcome

Leaving customers waiting for confirmation following their initial interaction with institutions encourages reciprocal behavior from them. Quick communication can be the difference in an engaged user or an inactive one. To make matters worse, many institutions follow a long silence with follow up paperwork or blatant cross-selling, which sets an unfriendly tone at best and a demanding one at worst.

First impressions matter, and in the days of instant gratification and over-communication, it’s best not to keep customers waiting. To ensure satisfied customers, welcome them with timely, personalized messaging to make them feel good about their decision to partner with the institution. It is important to build a relationship that sets positive expectations (from the very beginning) for a relationship that will last for years to come.

Forgetting Your Customers v. Communicating Early and Often

From a marketing perspective, opening a checking or savings account is not the end of the customer journey, it’s really just the beginning. Banks and credit unions sometimes only communicate to the point of finalizing a new account, and then fail to continue connecting after the account is opened.

This strategy, or lack thereof, can negatively affect their bottom line because they are missing opportunities for future engagements. Open accounts that go unused or never expand to other financial services that the institution offers are not as profitable and tend to be short term.

When someone opens a new checking account, they have a lot to do. To take some of the load off customers, institutions can make the entire process easier. Financial institutions should consider employing personalized messages and onboarding checklists – supporting these efforts with digital tools that make it simple to complete onboarding and prepare them for the next step in their customer’s financial journey. After a smooth onboarding process, begin to offer other related services for their other financial needs – because inevitably, all customers have additional needs outside of their checking or savings accounts.

Missed or Misused Opportunities v. Relationships and Retention

Credit unions and banks often miss opportunities by cross-selling too early or not at all. Often an institution’s customer will turn to a competitor when they have a specific financial need. This is simply because the customer saw the competitor’s “special offer” that met an immediate need whereas their current institution’s additional products (that could have just as easily met that same need) were never effectively communicated or advertised to them.

Checking and savings accounts are not the most profitable service but are necessary and can positively affect profitability when pivoted into relevant cross-selling. When a customer has been successfully onboarded, it is time for the institution to communicate additional services that can help their consumer’s financial journey.

Of course, it’s important to remember that each consumer’s journey is unique and therefore needs to be personalized. Now is the time to highlight excellent mortgage rates, education savings accounts and vacation layaway programs – think about what is appropriate for that individual consumer. Relevant cross-selling can meet customer needs while also building and strengthening relationships that increase engagement and long-term loyalty.

Collecting Consumer Data for Nothing v. Standing Out from the Pack

When institutions and financial products are viewed as a commodity, communications can be cold and impersonal. The financial services industry is a data-rich industry, yet many banks never move past collecting consumer information and into utilizing those insights for better, more personalized customer experiences.

Data-driven digital strategies do not mean that institutions get to forget the individuals behind that data. Rather, community banks and credit unions should lean on a data strategy that proves their value by utilizing their specialized knowledge and pairing it with their features and products. This helps community institutions compete with “big bank” tactics while adding warmth and relevance – using technology to solve pain points for their customers or members.

Strategic partners, like fintechs, can help transform the institution’s traditional strategy into a data-driven dream. Understanding that while data is abundant in the financial services industry, most banks and credit unions house their data in silos which can be challenging to integrate and deploy.

However, institutions that embrace the insights from their data are positioned for success, gaining a competitive edge. When used properly, customer data can build campaigns that are delivered to the right person, in the right channel, at the right time. In fact, according to marketing expert, Seth Godin, “The technology that changed the marketing world and will continue to change it is the ability to treat people differently – instantly and at scale. That is what you must invest in.”

Many institutions recognize the need for these actionable offers but need a hand to complete their digital transformation. Strategic partners can help fill in these gaps.

To build better experiences that meet customers where they are in their financial journeys, banks and credit unions must adopt modern solutions to build better, more engagement customer relationships while improving their overall bottom line.

Jill Homan is president of DeepTarget, a FinTech company developing and deploying an open, data-driven customer engagement and cross-selling platform for credit unions and banks.