How Well Do You “Know Your Customer”?

“Know Your Customer” is no longer solely a compliance exercise for banks – it’s an opportunity for them to execute on strategic goals while deepening existing relationships.

Community bankers know that personal relationships and superior service differentiate their institutions from mega-banks and non-traditional competitors. But declining branch traffic has resulted in fewer opportunities for bankers to meet customers face-to-face and foster high-touch relationships. How can bankers counteract this disruption while interacting with customers in their preferred channels? The answer is just a few clicks away.

A bank’s existing customer base is rich with opportunities for retaining and expanding existing relationships, but is often left untapped due to the antiquated and siloed systems that fragment the customer data. The challenge facing most banks is determining how to extract this treasure trove of data and turn it into meaningful, actionable information.

Fortunately, all it takes is a willingness to embrace innovation, the right analytics tool and a data strategy to extract information about your highest-value or highest-potential customers.

Analytics tools enable bankers to delve deeper into customer relationships and behaviors. Behavioral insights are fundamental to understanding the flow of money for currency transaction and suspicious activity reporting. These same concepts can be leveraged to assist sales, marketing and customer retention efforts that are aligned with customers’ needs.

This insight can empower bankers to specifically direct sales efforts towards strategic objectives, such as broadening single-service or limited-service relationships. Executives can make timely decisions with performance information available at the click of a button. Sales and marketing can base their efforts on timely and current information. Branch staff members can improve customer service by personalizing conversations, messaging and cross-sell efforts toward products and services customers actually need.

Having these insights readily available could reinforce face-to-face sales efforts or personalize marketing efforts, especially for customers who seldom visit a branch office.

But without a strategy, information on your bank’s customers may not yield optimal results. So what should you do now to get to know your customers better?

Evaluate your bank’s existing systems and report-writing tools. The sheer volume of data contained in a bank’s core system can be overwhelming; the amount of time it takes to mine the data accurately into a multitude of reports can be very labor intensive. Determine whether your bank has viable means for extracting the data and turning it into meaningful and actionable information.

Recognize your bank’s competitive advantage when it comes to existing customers. Without a data analytics system, your bank will struggle to capitalize on its distinct competitive edge. The best tools can instantaneously create multiple visuals with a significant amount of potentially actionable data. Self-service data removes reporting roadblocks that bankers may experience when attempting to extract and update data.

Align the focus of data mining to support your bank’s strategic objectives. If growing core deposit is a strategic objective, executives should ensure they have the capability to mine information that identifies loan customers who do not have deposit accounts. If retaining checking accounts is a goal, executives will want to easily identify and track accounts that do not have a direct deposit or are not using ACH, debit card, mobile banking or bill pay services.

Adopt an enterprise approach to data analytics. The tone at the top should drive expectations for data use, and consistent reinforcement from the C-suite will sets the objectives of the sales environment and culture. Bank leaders will need to communicate and prioritize the institutions’ data strategies and expectations for data use. Inconsistent, siloed use of data could jeopardize the desired sales culture.

Personalize marketing and sales efforts. Once you have the data in an actionable format, use specific customer information to target, market and personalize sales conversations. High-touch sales efforts will become more meaningful when they are personalized.

Train sales personnel on how to use the information. Providing sales personnel with multiple reports or activating a data analytics tool is only one step. Assess your bank’s sales environment and provide training that is consistent with your culture to ensure your team embraces the data and understands how to use it effectively.

Adhering to these simple strategies will ensure that your data contains the information you are looking for so that your bank distinguishes itself through enhanced personal relationships and superior service. That, in turn, differentiates your institution from the mega banks and non-traditional competitors.