OPINION: Why financial institutions need to embrace the single customer view

Michele Szabocsik

Michele Szabocsik, VP of Marketing, BlueConic

According to a recent BDO survey, 77% of financial institutions plan to increase their digital investments in 2022. But despite the impact of COVID on consumer demand for digital banking solutions and pressure from digitally native new entrants, change has been slow, with just 30% of traditional financial services companies currently implementing a digital transformation strategy.

As if these challenges weren’t enough, a number of other macro factors are also disrupting the status quo in unprecedented ways, including rising third-party data restrictions and ubiquitous consumer data privacy regulations like GDPR and CCPA that impact the way data is collected, stored, and used for marketing and personalisation.

All these factors are resulting in the need for greater business agility, a shift away from third-party data to first-party data, and the adoption of a new, smarter customer engagement model that’s both privacy-compliant and creates value for customers. For traditional financial services institutions that want to level the playing field with digital natives, this means embracing strategic initiatives that fundamentally transform how their business understands and interacts with customers. This transformation should be grounded in making the single customer view accessible to growth-focused teams (e.g., marketing, digital product, customer experience) to power their customer acquisition, engagement, and retention efforts.


Obstacles to a single customer view

The financial services industry has an advantage over others due to the sheer breadth and depth of first-party customer data it collects in the normal course of business. They often have multiple distribution models (direct-to-consumer and through brokers and intermediaries), and they have complex technical landscapes with numerous siloed systems that each have their own unique way of storing data and recognising customers.

Some companies have invested time and money into a centralised data solution that captures individual-level behaviours, customer lifetime value (CLV), marketing consent status, and more, but it doesn’t enable the business users responsible for growth to actually do something with the data — and especially not with the speed in which they need it. They still have to wait on overburdened IT teams or costly external agencies to query and normalise the data, which is days or weeks old by the time it’s ready for use. As a consequence, departments across the organisation are left to make critical decisions based on a partial view of the customer, creating disjointed and unsatisfactory experiences that hinder customer acquisition and retention and lead to high levels of churn.


Enabling technology for digital transformation

To combat these operational inefficiencies and transform their business, financial services companies need to reassess their priorities and take action to modernise their infrastructure for today’s digital world. By embracing modern technology, like a customer data platform (CDP), these companies can create an actionable and privacy-compliant single customer view for the business, and make that unified profile data available to growth-focused teams and their tools in a format they can use to effectively orchestrate individualised experiences across all customer touchpoints in ways that weren’t possible before.

For example, with access to unified and actionable customer profiles, marketers and other growth-focused teams can construct robust, multi-dimensional segments in mere minutes (not hours, days, or weeks), trigger or suppress messaging based on a full understanding of the customer at every point in their journey, and deploy their own models like CLV, propensity, and lookalike to uncover meaningful customer insights and act on them faster. Moreover, since individual profiles capture and store consent and update in real time as consent preferences change, financial services companies can build trust with consumers while reducing risk for their business at the same time.


Digital transformation of marketing in action

A well-known insurance and asset management company in Europe is just one example of a company that is leveraging a CDP to personalise experiences, streamline consent management, and drive customer engagement across channels at scale. The company, which offers a range of products and caters to a number of demographics, was struggling to move away from its one-size-fits-all approach to marketing and create customer journeys that fit the needs of its various clients.

By collecting and consolidating customer data (e.g., behavioural data like recency and momentum, predictive data like propensity to buy, interest data, demographic data, survey responses, and more) from across disparate systems and sources into person-level profiles, the company is able to deliver the best interaction for every client at every stage of the customer lifecycle – without putting undue onus on their marketing or product teams. For example, because data within the profile is persistent, the company can automatically trigger messaging to clients with five- or 10-year mortgages that are set to expire within the next six months on a rolling basis. The company can also easily create targeted segments and automatically push them to Facebook to provide individuals with expiring mortgages with relevant blog posts that explain what to do when their mortgage is expiring.

To minimise data privacy risk, the company is also able to capture client consent by purpose (e.g., personalised communications, data for analytics, etc.) and store that consent at the individual level in a unified profile. Any changes to a client’s privacy preferences are then automatically federated throughout their technology ecosystem. With consent managed in one place, the company can get IT, legal, and compliance aligned quickly, reduce risk, and get them moving on to more strategic projects.

In an era with a tremendous amount of consumer choice, it’s imperative that financial institutions accelerate their digital transformation to meet the varying needs of all customers. Failure to adapt has real consequences for the entire organisation and cross-functional business teams alike – from falling short of growth goals and business outcomes to risking millions in fines for privacy regulation violations. By deliberately executing on transformation strategies grounded in a privacy-compliant single customer view, financial institutions can pave the way for continued success both now and in the future.


Image credit: peterhowell

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