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How an investment in customer intelligence could have yielded great gains for a prominent bank

 
September 23, 2016

In a conversation I had with friends over the weekend, they mentioned that their son had just moved his bank account over to his new wifes bank.

For many, that may be as far as this conversation would have gone. However, because I work for a company that sells customer analytics software to help banks prevent things like this from happening, I was eager to hear more about their sons decision. And what I learned surprised me.

As it turns out, our friends are premier customers at a large, well known bank where they have banked for many years. They became customers by default after their local bank was purchased by their current bank. They remained customers for convenience and to avoid the hassle of opening new accounts elsewhere.

They have checking and savings accounts, a home mortgage, a home equity line of credit and other investments and, when their children left for college, they set up accounts for them for the convenience and ability to transfer funds between accounts.

Yet, in spite of all the business they do with the bank, they do not feel a connection or deep sense of loyalty to the organization. And, as it turns out, neither did their son.

When I delved a bit deeper, it became clear why.

  • Even though my friends have their home mortgage at the bank, they routinely receive refinancing solicitations from the bank that are 2% higher than their current mortgage.
  • They refinanced their home mortgage twice through the bank because they thought it would be easier and faster the second time around. In reality, however, both times involved a lot of duplicate paperwork processing. Our friends said if they were to refinance or purchase another home in the future, they would not necessarily use their bank, since it was not any easier refinancing with them than it had been in the past with other mortgage companies.
  • Their children, both millennials and well-paid lawyers and just the type of customers you would think the bank would like to keep long-term, have never been contacted by the bank or made to feel like valued customers in any way.

The experiences mentioned above could have and should have been different. The use of advanced customer analytics would have made it clear to the bank what kinds of promotions my friends would be interested in, preventing irrelevant offers for refinancing at rates higher than their current mortgage rates. Leveraging customer and operational analytics, the bank could also have facilitated a much smoother refinancing process, making it more attractive for my friends to choose them in for any future home purchase or refinancing needs.

The loss of customers like my friends son is also a huge missed opportunity for the bank. Indicators along the way could have made it clear that their son was an ideal customer to retain. He, his new wife and their friends represent the future and banks that use customer intelligence and insights to engage with and build authentic relationships with customers and prospects will thrive.

Kathleen Holm is Marketing Director of the TCS Digital Software & Solutions (DS&S) Group. She has more than 25 years of experience marketing technology software and services to enterprises worldwide. She leverages her extensive background in enterprise software technology to help organizations develop effective marketing strategies, create targeted messaging and positioning, and implement effective go-to-market plans to improve corporate performance. Prior to joining TCS, Kathleen was a Senior Principal of technical product marketing for Oracle Fusion Middleware where she was responsible for defining the marketing strategy based on industry maturity and customer trends. She also held positions at IBM including Market Manager for WebSphere Developer Programs, Market Manager for Tivoli Integrated Service Management and Tivoli Brand Specialist. Prior to joining IBM, Kathleen worked with four high-tech startups.