The market for financial products is more crowded than ever. How can financial institutions not only capture new customers, but acquire the right ones, and create enduring relationships?
Proactively combating account fraud is currently top of mind across the financial services industry. In addition to changing sales incentives and investing in employee education, banks are increasingly investing in advanced analytics to root out instances of fraud.
As application volume has increased substantially in recent years, one leading U.S. issuer noticed that the number of non-authorized accounts was growing proportionally. Recognizing an opportunity to strengthen its fraud detection process, the issuer used APT’s Test & Learn® software to build propensity models that determine a new account’s likelihood of being fraudulent.
When asked about future strategies, APT research shows that financial services institutions (FSIs) consistently report a focus on enhancing omnichannel offerings to meet the needs of a rapidly evolving customer base. Specifically, 60 percent of banks surveyed highlighted channel migration as a strategic priority, and 100 percent of those respondents said they are focused on improving digital onboarding processes to accelerate this channel migration.
Based on those findings, it is clear that banks aspire to create a seamless experience across channels and reduce reliance on the branch for transactions. This is a win-win shift for FSIs and customers alike. For banks, there are significant cost savings, and customers gain a more convenient and seamless banking experience. Further, research from Bain indicates that omnichannel customers are more loyal to their primary bank than those that only bank in one channel.
In an article featured in Information Age, APT’s Marek Polonski discusses how businesses can make the most of the data already available to them to drive better decision making and increase revenue. He outlines how to make an organization’s data actionable in five key steps. The first? Don’t be a perfectionist when it comes to data collection. Click here to read about the other four.
Banking Strategies recently published an article by APT SVP Will Weidman, naming the top trends that FIs should watch in 2016. Weidman says, “2016 is looking to be one of the most transformative years in financial services in decades. Disruptive competitors are growing, digital and mobile continues to evolve, branches look more and more like Apple stores and interest rates have started rising. Banks will need to embrace smart innovation not only to keep up, but to truly differentiate themselves in a cost effective manner.”
Click here to read more (requires subscription).
From front-end products such as online banking and mobile payments to back-end operations such as processing transactions, leading banks continue to seek centralized, automated solutions to maximize efficiency.
However, wealth management practices and operations remain significantly less centralized. There is still a lot of debate regarding the efficiencies that can be gained by streamlining financial advisor operations through corporate resources. (more…)
McKinsey & Company recently posted an excellent article, “Getting big impact from big data,” and addressed a proverbial elephant in the room: while most executives believe big data analytics is a critical tool for success, fewer companies have been able to successfully use analytics to drive major business decisions.
So what is preventing organizations from unlocking the value of their data? According to McKinsey a major barrier has been internal organizational cultures that are not familiar with analytical practices and therefore unwilling to take ownership of a new system with unproven results. This keeps organizations from being able to operate data driven initiatives at scale. So while software solutions can help, there is also a significant cultural challenge that needs to be overcome for organizations to realize the full value of big data. (more…)
APT SVP Will Weidman recently authored an article for Banking Strategies, outlining his top 10 predictions for financial services institutions in 2015. Weidman summarizes, “After years of debate the battle lines have been drawn and it is clear what financial services institutions must do to succeed. In the new world order, the winners will be tech-savvy institutions that constantly innovate while managing expenses carefully.”
Weidman’s 10 predictions for financial services institutions in 2015 are:
1. Drive revenue with online/mobile channels
2. Make smart branch transformation investments
3. Improve relationship management in commercial and wealth management
4. Prepare for rising rates
5. Combat new entrants such as Walmart and GoBank
6. Accelerate and improve channel migration
7. Intelligently rationalize the branch footprint
8. Figure out universal staffing
9. Find new levers to reduce costs
10. Improve efficiency ratios in wholesale banking
Click here to read the full article.
APT Co-Founder and Chairman, Jim Manzi, recently co-authored a Harvard Business Review article with HBS Professor Stefan Thomke about how experimentation can help companies de-risk new ideas and drive innovation.
A key point that the article makes is that testing can be an agent for meaningful organizational change, rather than simply a new analytical tactic: “The lesson is not merely that business experimentation can lead to better ways of doing things. It can also give companies the confidence to overturn wrongheaded conventional wisdom and the faulty business intuition that even seasoned executives can display. And smarter decision making ultimately leads to improved performance.”
Click here to download a full copy of the article.
As competition closes in on all sides for retail banks (e.g., growth of online-only providers, new mobile players, brand consolidation, and more), organizations are doing all they can to bring in deposits. Adding to the pressure, rates are expected to rise fairly soon, which makes it essential for banks to acquire new accounts now. Just like community banks of generations past, financial institutions today are enticing customers with incentives and “freebies” to spur new account generation. However, this isn’t your mother’s free toaster! Today’s marketers are offering cold, hard cash to customers who meet certain requirements. This raises the essential question for bank executives: is this all worthwhile in the end? Are we needlessly spending hundreds of dollars per customer to increase new account generation? How can we know the exact payoff of such offers, and what can we do to make these programs as profitable as possible?