Small banks can make a big splash with data analytics
Only 9% of small banking institutions with assets less than $1 billion are currently using data analytics. However, data analytics can give small banks a huge advantage over larger ones, since it allows them to tailor the banking experience to the customer.
Here are the 5 major ways that banks can benefit from data analytics:
1. Monitor Bank Security.
Analytics aided techniques such as digital credit assessment and advanced early-warning systems help banks to monitor their performance. This data can help the banks to better understand where they stand and what they need to improve. It can also help banks to monitor their cyber security and fight off any potential risks to the system.
2. Fight off risks for the customer.
Using machine learning, a model of the spending habits of a customer, banks can more accurately detect fraud on a client’s account. Bank security can easily spot an out of character purchase and notify the customer to ensure it was a purchase they made.
3. Understand customer demographics.
Understanding what different types of customers want and need from their bank, helps banks to more effectively market and target customers. They need to provide different products and services for 20-30 year olds who are just starting out then they would for 50-60 year olds who are saving for retirement. Data analytics can tell banks the demographics of their customers and what those different demographics are looking for.
4. Make a larger profit.
Banks can use data analytics to grow their business. Data analytics can help to recruit and retain customers, making the bank money. It can tell banks where they should put their money. Some banks have created algorithms to predict how much cash would be needed in each one of their ATM machines, saving the banks money.
5. Happy customers.
Using data analytics allows banks to tailor the experience to each customer, keeping customer satisfaction and retention high. Customers, especially millennials are looking for banks that provide digital options, and data analytics will help banks to achieve the customized digital experience that many users are looking for when choosing a bank.
Story via BizTech