Data and Analytics in Digital Banking

Future success depends on understanding current behavior

Consumers rely on digital solutions to live their financial lives. As digital adoption grows, visibility into trends and behaviors helps financial institutions meet evolving consumer expectations. And that begins with data.

Data is critical to accomplishing business goals, especially now. By reviewing relevant data, financial institutions can better understand how consumers are engaging with digital solutions, such as person-to-person (P2P) payments, digital transfers, online bill payments and more. The more clearly financial institutions understand those trends and behaviors, the better they're able to meet consumer expectations for personalized experiences that meet their specific needs.

The Importance of Personalization

According to a 2021 McKinsey report, 71 percent of consumers expect companies to deliver personalized interactions, and 76 percent get frustrated when that personalization doesn't happen. Additionally, the fastest-growing companies derive 40 percent more of their revenue from personalization than their slower-growing counterparts.

Those growing companies are onto something: they understand that personalized experiences create deepened relationships, and that translates into added revenue. So, with personalization being so important, financial institutions must ensure they have the right data to design a targeted marketing and communications approach that reaches consumers more effectively.  

The Right, Most Relevant Data

Data can help solve many business challenges, as long as it's the right data. For example, a large financial institution recently implemented person-to-person payments but had no way of knowing which consumers were engaged with the service. Now that management uses an analytics solution for digital payments products, they can quickly identify P2P payment details such as new registrations, users who haven't made a transaction and users who are actively making transactions.

This enables them to create targeted marketing strategies to drive engagement and strengthen consumer relationships. Without obtaining and digesting that data, the institution would still be wondering about its digital effectiveness, and whether it was realizing a return on its investment.

Many financial institutions have trouble obtaining timely reporting for digital solutions activity. Often, departments are siloed and insights are hidden within various reporting solutions, making it a challenge to pinpoint specific trends and gather valuable data. By implementing a data and analytics solution specific to digital payments activity, financial institutions can have a clear view of digital engagement and can eliminate inefficiencies in gathering data from various sources. And they may be surprised by the wealth of useful information they discover.

Let's Get Granular

A data and analytics solution doesn't just report on activity; it helps a financial institution understand consumers on a more specific, personal level. For example, having a clear picture of digital payment use by generational cohort enables institutions to determine which messaging resonates best with each consumer group.

According to a digital engagement study conducted by Fiserv in 2021 for a large credit union, 12 percent of members completing online bill payments are millennials. Additionally, 55 percent of highly engaged P2P payment users are under 30 years old. Being able to dive further into this type of data helps to determine engagement by generation and ensure the right marketing message is delivered to the right audience.  

An Essential Investment

Expect to see continued digital evolution in the financial services industry in 2022. Visibility into consumer engagement trends will remain a focus as financial institutions strive to better understand consumer behavior. Personalization will also be a crucial strategy to create meaningful relationships and increase consumer loyalty.

And now, more than ever, investments in data and analytics will be a priority for financial institutions that seek to drive revenue, meet business goals, understand market trends and better reach consumers.

Interested in learning more? View our on-demand webinar, Advanced Data Analytics: A 360-degree View of Payments.