Can Unified Data and Analytics Really Change your Bank's Culture?
In today's highly competitive market, companies that embrace customer-centricity achieve higher customer satisfaction, engagement, retention, and lifetime value. That’s true across most industries, and financial firms are no exception.
But to make the transition to customer-centricity, companies need more than a fancy new data lake, CRM system, or chatbot software in customer service. The keys to success go well beyond any individual system or department: True customer-centricity requires the whole organization to be aligned around the same goals, and the same metrics. It cannot happen without the right tools and culture in place.
This is a high bar for financial firms weighed down by legacy systems, heavy regulatory compliance, and a constellation of physical branches. Can unified data and analytics be the answer?
Retail banking in the U.S. is at a crossroad
By some measures, retail banking has never been healthier: deposits at the top-25 U.S. banks have tripled since the 2008 financial crisis. But customer loyalty is eroding across the board, and competition from digital and niche banks is intensifying.
Case in point: In March 2021, digital banks used their balance sheet to front stimulus checks for their customers. Traditional retail banks couldn't match that move, and for millions of households living paycheck to paycheck, it made a big difference and created a major incentive for new customers to sign up.
Should banks continue to close physical branches to meet their more nimble digital competitors on their turf? That certainly seems to be the consensus. More than 5,000 branches have closed since 2012. At the current rate, analysts estimate that banks will be entirely branchless by 2034. But a branch can be a trust booster, especially for aging customers. Big retailers (e.g., Walmart) and service firms with name recognition and a physical presence at every street corner (e.g., H&R Block) are bucking the branchless trend and moving into banking themselves.
With competition coming from both ends, retail banks need to be particularly attentive to the needs of their customers and the many ways they use their services today. That's where unified data and analytics come in.
What are the benefits of unified data and analytics?
Unified analytics is a relatively new marketing solution that uses real identity (not cookies or device IDs) to connect datapoints across all the channels that consumers interact with, and brings together marketing mix modeling (MMM) and multi-touch attribution (MTA) to provide marketers with a centralized view of marketing performance.
With a single source of truth at their fingertips, marketers can pinpoint what marketing investments are panning out or not, uncover new consumer segments, and curate personalized experiences to engage their customers and, over time, build up the value of their relationship with them. They can plan for the long-term (like launching a new product or campaign) and address short-term priorities (like optimizing an omnichannel campaign on the fly) without having to worry that the two might get misaligned.
The benefits of unified analytics can be immediate. A recent analysis by Forrester showed that companies that deploy Neustar Unified Analytics can see a return on their investment within six months, and that’s just from the cost savings associated with improved targeting efficiency, frequency capping, and streamlined partnerships. Beyond cost savings, unified analytics can boost marketing's contribution to sales by one-third after one year, and by two-thirds within two years.
But as impressive as those results are, the real breakthrough is that unified analytics forces a company to take a very close look at the way it operates, and the way its top executives make decisions. For financial firms, that cultural dimension is most promising.
The cultural impact of unified analytics and data integration
Financial firms are big users of data analytics, but they typically use those capabilities for operational purposes—to flag unusual activity, for instance, or monitor compliance. Few have approached customer data the way a retailer or auto manufacturer might: to capture every single touchpoint on the path to conversion, and optimize the company's interactions with each and every one of its prospects and customers.
Why? Financial data is particularly sensitive, and any breach of trust, privacy, or data security can have devastating consequences. Many traditional retail banks have built their reputation on stability, reliability, and peace of mind. That mantra has fostered corporate cultures that tend to resist change and put up firewalls between departments. For marketers looking to build bridges across product lines, that's a major obstacle.
Unified analytics offers a way to break down those firewalls. It's a bit of a catch-22 though: unified analytics can change the company's culture, but the company's culture needs to change too in order to understand the vision of unified analytics in the first place. A recent Banking Dive playbook commissioned by Neustar spells out the five steps that marketers at financial firms can take to break through:
- Learn: Educate yourself on what unified analytics can do for your company. You need to understand the benefits to pitch it to your teammates and the rest of your organization.
- Frame it right: Make sure to pitch unified analytics as a revenue generator, not just as a cost saver. Size up the benefits using business metrics that can be stacked against other investments your CEO and CFO are contemplating.
- Start small: Get buy-in to start with a small project, but make sure it's highly visible and likely to make an immediate impact.
- Evangelize: Remain transparent throughout the project, and use early success to spread insights from unified analytics and get broader buy-in from your C-suite.
- Reap the benefits: Use unified analytics widely and see your company embrace collaboration, experimentation, agility—and customer-centricity.
An early adopter at one of the nation's largest banks had this to say about unified analytics: “The beauty of the capability is really as a unifying cultural mechanism. Beyond the solution itself, it helps encourage that cultural pivot toward joint decision-making, and a renewed curiosity across the company to explore new opportunities. Thanks to unified analytics, we now make decisions that serve our customers better."
If you're not on the path yet, now is the time to take the first step: Download the full playbook here: How to Unlock Growth at Financial Firms with Unified Analytics, and contact us to find out how Neustar can help.