Determining the Next Best Action to Grow Customer Relationships

A key challenge for banks has always been to balance the need for growth against the amount of risk they are willing to take on to achieve that growth. In today’s mostly digitalized marketplace, this challenge is compounded by customer expectations for more personalized interactions, especially those relating to offers, promotions, and customer experiences.

The natural tendency is to go all-in to meet these customer demands, yet they must be balanced against real risks. To be both profitable and resilient, it is necessary for financial institutions to use real-time data, analytics, and decisioning at scale so they can determine the next best action for each customer.

One important way leading banks are doing this successfully is by implementing next best action strategies, coupled with technology that leverages artificial intelligence (AI) and machine learning to automate and better contextualize, personalize and time the options, offers and information delivered to employees and customers.

Next Best Action: Growing Smarter and More Capable

Bank customers increasingly expect that the service they receive across online and offline channels – via website, mobile app, telephone, text messaging and bank branch – will be consistent, seamless and personalized. Customers also want to be rewarded for good financial behaviors, like paying bills on time or spending less than they save. To turn these desires and related behaviors into long-term customer loyalty, banks need a strong understanding of customers’ circumstances through both difficult and prosperous times, as well as the ability to act accordingly.

Most banks are not designed to handle the modern digital demands that are expected by today’s consumers. Many are struggling with legacy systems and lack the ability to implement a robust next best action strategy, which requires technology that centralizes data and decisioning.

AI and machine learning help supercharge next best action strategies because they enable banks to process more data, make more complex decisions and learn more from the results of past decisions in ways that previous technology generations could not. This empowers organizations to become smarter and more experienced in the process, and their ability to comprehend the context of customer interactions and behaviors improves tremendously. As a result, financial institutions are better able to deliver hyper-personalized offers to the right customers when and where it matters.

Enable a Deeper Understanding of Customers

A bank’s portfolio is very diverse. It’s just as crucial to know where yield can be found as it is to tailor and deliver the right offers to customers who find themselves in better financial situations. These pockets of opportunity are extremely nuanced – and it’s hard to derive the right approach and offer terms, especially in inflationary environments.

Financial institutions need a detailed view of each customer to gain insights so they can proactively determine the specific next best action or experience to help, grow, mend, or nurture the relationship. A next best action approach makes it easier to maximize customer relationships because it increases engagement as well as relevance to customers’ circumstances at the moment. By meeting those point-in-time needs, banks can benefit from expanded customer relationships, increased customer loyalty and better customer engagement.

FICO’s technology monitors customer behavior and drives analytic insights to maximize growth opportunities. It leverages both traditional and real-time data to create a 360⁰ view of each customer. Within this view is a precise profile based on risk, financial resilience, circumstances, preferences, transactions and digital behaviors.

Drive Growth while Managing Risk

Ultimately, the success of any next best action strategy will rest on the technology that’s fueling it. Being profitable and resilient requires a bank to excel at leveraging its real-time data, analytics and decisioning capabilities at scale.

FICO’s approach to next best action aims to enhance customer experiences and expand relationships while also balancing profitability with risk. By monitoring customer behavior and driving analytic insights, FICO technology maximizes growth opportunities through careful, risk-aware offer targeting. FICO Platform uses mathematical optimization to balance customer demands with the organization’s business objectives. This ensures that each engagement becomes part of a strategic, data-driven pattern of customer treatments and offers based on the next best action for each situation.

Learn How FICO Can Help You Achieve Next Best Action Success

• Next Best Action / Next Best Offers – Four Pointers to Success
• 4 Key Ways to Drive Profitability with Overlimit Authorizations
• How to Unlock the Power of Hyper-Personalization in Banking