It is the age of financial technology (fintech). Companies have only two options; disrupt yourself or be disrupted. There are no middle grounds. It is a mad chase to not be left behind.
All around the world, including here in Nigeria, financial institutions are prepping themselves for the ultimate survival. There are hardly any banking institution that wants to be associated with the word “old” any more.
So in recent times, we have seen vigorous efforts by banks to ‘invent’, ‘unlearn’ and ‘relearn’. Union Bank has since ditched its old ways of providing services and reformed their banking premises and unleash a couple of digital products. First Bank has joined the ranks of banks seeking the attention of young and upwardly mobile individuals. To achieve this, the bank said it intends to achieve 30 million customer base and 70 per cent digital banking transactions in 2019.
Wema Bank recently launched their ALAT for Wema, a digital tool that ensures that customers do every banking transaction from the convenience of their mobile devices. Nearly all the banks have rolled out one or two digital products aimed at the making the life of the customer better.
The products are all part of a trend at personalising the customer experience and one thing they all have in common is big data.
If the customer is the king, data is the queen.
Boston Consulting Group (BCG) puts it better; data-driven transformation is becoming a question of life or death in many banks. Data-driven companies have shoved aside traditional players to become the most valuable in the world.
To be sure, big data refers to extremely large data that may be analysed computationally to reveal patterns, trends, and associations, especially relating to human behaviour and interactions. Players in the financial service generate huge amounts of data such as purchase history, profile data, browsing history or social media data every single day.
According to a report, Big Data in Banking for Marketers released by Evry, big data was born out of the necessity of data sets growing so large and complex that traditional tools are no longer sufficient to process this data. By aggregating large amounts of data from many different sources makes big data very powerful for business decision-making, revealing insights and behaviours faster and better than otherwise possible with traditional business intelligence.
In Nigeria and around the world, the rise of digital banking has caused remarkable growth in the amount of customer data that banks have in their possession, with all the points of the customer journey.
Any time you fill a new form, log in on a bank website or check your account on your mobile banking app, make a transfer from your bank to another bank account, etc, you are supplying data.
How they use data
Analysis of data, used alongside new technology and in particular mobile, is helping many Nigerian banks maintain their status as market leaders. Uzoma Dozie, chief executive officer of Diamond noted at the BusinessDay Fintech Summit recently that Nigerian banks are not waiting to be disrupted by start-ups in financial services rather they have long been taking the initiative leveraging on the data available to them.
Hence, banks use data to tailor product recommendations or offer insights into customers’ money habits. They are able to offer products and services tailored to individuals in real time.
Diamond Bank for instance, regularly calls customers to offer them credit cards at a certain limits. In other words banks are able to gauge the risk of offering a loan to a customer more accurately. FCMB are trying to customise customer experience using their My Bank I strategy.
Using artificial intelligence technology, some banks are able to predict through transaction data, the spending patterns of their customers. They are also attempting to predict customers’ engagement with their products.
