Digital Banking Commandment: Respect Your Customers’ Data!

Following the highly successful The 11 Commandments of Digital Banking eBook, we are kicking off a series of 5 deeper dive blog posts that group the 11 Commandments below into common themes.

1. Digital lift-and-shift is not a strategy!
2. Friction – not inherently good or evil
3. Be personable in this impersonal channel
4. Respect the data
5. Engage me, teach me – feed my TikTok obsession
6. Use your branch wisely!
7. Respect my time and match my effort
8. Pester me … but only when I want it
9. Be fascinated by your customers, not your technology
10. Make customers feel safe
11. Come together like a symphony orchestra

In this post, I’m discussing commandments 4: respect the data and 7: respect my time and match my effort

The COVID-19 pandemic forced companies to quickly reinvent themselves, their processes, and their services. Financial institutions should view this digital transformation surge as an opportunity to embrace intelligent technology that helps enable exceptional customer experiences and valuable outcomes. Financial institutions have access to a lot of data – from customers themselves, third-party organizations, meta data, and many other sources. Using that data to create more meaningful, personalized experiences allows us to make better decisions and to understand more about each banking customer.

Respect the Data

You ask customers for a lot of information. Respect the fact that they’re sharing their data with you by using it to deliver a better customer experience. Differentiate your banking customers based on their lifetime value, and go above and beyond to collect data on and deliver value to your most profitable customers.

According to Forbes, 90% of the world’s data was created in the last 2 years alone! Customer-level data (i.e., a 360º view) should be table stakes for financial institutions, meaning there needs to be a central repository of data that’s accessible in real time. Thanks to applied intelligence platforms and data-based decisioning solutions, organizations can now action data to gain more holistic views of their customers and make better decisions.

Customers don’t view you in silos, so you can’t interact with them in silos. In order to succeed in today’s banking environment, banks need to create engagement. This means having the ability to pull together multiple accounts into a unified view and sharing insights with customers, which can include external data as well. The channels you use to proactively communicate with customers are the clearest and most frequent signals that you know them (or not), so make sure to get it right.

People don’t care what you know until they know that you care. You have an opportunity to strengthen your relationships with customers every time they interact with your website, mobile banking app, or bank branch employees. Remember that trust is the #1 thing banks have that many FinTechs don’t have, because we feel secure knowing that long-standing, regulated financial institutions will be around for a while. Build on that trust by making sure customers understand why you’re asking for specific data and how you will use it – for example, if asking new customers to submit ID verification that requires scans of their driver’s license and a selfie, explain how you’re going to ensure they’re protected from ID theft and spot fraudulent transactions.

The financial data that banking users share with you, explicitly and implicitly, is an asset – even a gift. Demonstrate to customers that you value it and that you’re using it to provide them value in exchange. By delivering insights frequently and in granular detail, you’re providing a level of transparency and awareness that customers now crave.

Respect My Time and Match My Effort

“Going digital” isn’t about streamlining banking transactions to the maximum extent possible. It’s about optimizing each interaction so that the value the customer gets is proportionate with (or ideally greater than) the time and effort they invest themselves. Banks don’t have to focus on designing the fastest digital route for customers – processes can, in fact, be longer if they are intuitive and engaging.

You should have complete awareness of what data you have, what data you can obtain via third-party sources, and what data you need gather from the customer directly. You will lose business if you ask people for redundant information or make existing customers feel like they’re applying for the first time. Avoid asking for information you don’t need, and don’t make customers provide the same information more than once – it’s fine to have them confirm (e.g., with a pop-up box), but don’t force them to type it in again. If you ask for something, make sure to explain why you need that data.

Be proactive and find ways to increase value for your customers. You can start with low-hanging fruit by tackling opportunities that add value to customer transactions but don’t require much additional work or expense on your part. Surfacing actionable insights, like your customer’s updated credit score, is an easy way to add value to a routine interaction.

Remember the WIFM (What’s in It For Me?) rule – for people to act, there must be a reason to act. Do you want customers to link their other bank or credit union account? Do you want to be their primary bank? What incentives (e.g., cash, gift card, instant funding) are you giving them? Are you providing solid value in exchange for the information they’re giving you?

Financial institutions should constantly be re-evaluating the UX in order to add new functionality and meet increasingly higher levels of customer expectations in the banking industry. Yes, it takes work to pull data from different silos for an integrated customer view, but it is well worth the effort and cost. Do the work for your customers; don’t pass the work along. Respect each customer and their time, and match their effort.

How FICO Can Help You Advance Your Digital Banking

• Watch my LinkedIn Live video with Alex Johnson of Cornerstone, talking about the customer journey in the banking industry.
• Watch my LinkedIn Live video with Melaina T. Vinski of IBM on humanizing the digital banking experience.
• Download the 11 Commandment of Digital Banking
• Explore FICO Platform