Customer analytics slow to catch on
If you were to believe the hype, the banking industry is on the verge of an analytical revolution.
Doesn't it just seem like banks are getting savvy with their data, especially customer data? Isn't that what the Big Data revolution is all about?
To hear some people talk about it, banks are using sophisticated online and offline techniques to intelligently assess what their customers need, in order to present upsell-and cross-sell opportunities that have a greater chance of success. They are said to be mimicking the savvy process of the likes of Apple and Amazon--not to mention the Obama campaign--to usher in a new era of marketing savvy.
That's what people are talking about, but the reality is that the financial services industry is far from that nirvana. Research by American Banker has found that "to our surprise, most (71%) of the 170 bankers in the weighted survey do not, but within a year that might not be true. Among those non-users, the plans to buy analytics are not impressive. Only 2% plan to buy customer analytics in the next six months, 4% in the six to 12 months and 14% in more than a year from now."
What's holding back the wave?
"Cost was the biggest barrier, noted by 36%. Another issue is other, more pressing IT issues taking precedence - about 32% of bankers surveyed said a focus on other initiatives was the primary obstacle to using customer analytics at their institution. The third primary reason for not using customer analytics, given by 23% of these bankers, was skepticism about the ability of the software to provide business value or a return on investment," according to BTN.
The situation is changing, and as the operating environment improves, we'll see more investment in these technologies. The ROI is clearly there.
- here's the article in BTN