Business Intelligence Links Customer Loyalty and Profitability in Banking, Says Cognos Industry Expert

Retail banks can use business intelligence to leverage disparate customer data sources into detailed profiles of high-value customers and help them build customer-focused solutions.

Ottawa, Ontario (PRWEB / PRWEB) February 2, 2007 -- Better customer service presents a strategic opportunity to improve the bottom line but requires more than providing longer hours, prizes, and incentives. According to McKinsey, retail banks must invest in every aspect of the consumer experience and offer relevant products.

This underlines the need for banks to adopt business intelligence as a critical element in their growth and profitability strategies, said Laurence Trigwell.

With this information, staff can respond accordingly: by waiving a customer fee or cross-selling additional products. Across branches, banks can identify where sales are highest and where they are flat. This may engender additional product offerings, services, or marketing campaigns.

Trigwell is director of financial services solutions at Cognos, one of the world's leading providers of business intelligence and performance management solutions.

Bank branches must drive new growth

Despite heavy investments in ATMs, telephone, and internet banking, research by Booz Allen Hamilton shows that 90 percent of customer relationships are still won or lost at the branch level.
For branches to drive growth, they must deliver what customers want: choice, convenience and customization.

Business intelligence can leverage customer data

CRM, ERP, and other transaction systems present a wealth of customer data -- buying patterns, purchase history, satisfaction levels, demographics, and other information. But according to Trigwell, this information often resides in silos which prevent banks from using it to inform decisions about new products and services.

According to Trigwell, many banks are turning to business intelligence to determine the mix of products and services that their customers need.

Matching products to customers

Trigwell then explained that banks can create detailed customer profiles identify who is most likely to buy which products and why. Banks can then examine the data from different perspectives to offer customized packages and services targeted to different customers -- whether it's an education loan for a 20-year-old student, or a mortgage and investment plan for a 40-year-old high-income earner. And instead of seeing so many meaningless products, customers perceive the services as being relevant to them.

Identifying profitable new customers is essential. But existing clients, too, offer long-term value, said Trigwell.

He explained that analysis, a core business intelligence capability, can uncover the most profitable customers or an individual's history with the institution, including purchases and changes in buying patterns.

"With this information, staff can respond accordingly: by waiving a customer fee or cross-selling additional products. Across branches, banks can identify where sales are highest and where they are flat. This may engender additional product offerings, services, or marketing campaigns."

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