Customer Analytics in Retail Banking: Why Here? Why Now?

by Bob Meara, May 28, 2013
Industry Trends
Global

Abstract

Customer analytics has been a good idea for some time, despite being implemented by a minority of banks. Advances in processing, memory, database design, and analytic methods can dramatically improve performance and lower costs for financial institutions. It’s time for banks to take the idea more seriously.

Data analytics is a complex subject and a complex undertaking. In the report, Customer Analytics in Retail Banking: Why Here? Why Now?, Celent examines the growing role of customer analytics (that is, predictive analytics applied to customer data) in retail banking and why it should be a priority for banks. Financial institutions with no customer analytics experience should take the idea more seriously. Institutions with customer analytics initiatives should revisit how things are being done.

There are at least three reasons developed in the report:

  1. The new normal in retail banking economics.
  2. The imperative for customer centricity in an increasingly self-service interaction environment.
  3. Technology advancements in data analytics.

Over the next five years, these factors will advance customer analytics from a project undertaken by a minority of banks to a core competency among the majority of financial institutions.

“Key retail banking priorities--specifically, using self-service channels to drive branch foot traffic, improving branch channel efficiency and effectiveness, and learning how to sell and service using digital channels--all require customer analytics,” says Bob Meara, Senior Analyst with Celent’s Banking Group and author of the report. “The good news is that there has never been such a variety of specialized customer analytics solutions. The time is now.”

This report demystifies customer analytics, makes a case for its use in practical ways, and provides an overview of the vendor landscape for customer analytics solutions alongside four detailed case studies of banks deriving compelling value through its use.

This 46-page report contains 22 figures and nine tables.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Tylor Tourville
ttourville@celent.com
Tel.: +1 617 424 3284

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

1

Why Here? Why Now?

4

 

Where Are We?

7

Demystifying Customer Analytics

9

 

Applications of Customer Analytics

10

 

Predictive Analytics Modeling

12

 

Doing Data Analytics

13

Case Studies: Customer Analytics in Action

16

 

BMO Financial Group: Sales Lead Management Engine

17

 

Isracard: Predictive Virtual Assistant

22

 

Taishin International Bank: Transaction Analytics

27

 

Taishin International Bank: Information Based Decision Support

31

Solution Landscape

36

 

Financial Services Vendor Solutions

38

Recommendations

43

Leveraging Celent’s Expertise

44

 

Support for Financial Institutions

44

 

Support for Vendors

44

Related Celent Research

45

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