It has almost become a daily occurrence when I arrive home from work and go through the mail to find yet another credit card offer from my bank, even though I already have a credit card with that very same bank.
Shouldn't they already know I have one of their credit cards? Do they even know me? Or, care to?
That’s the problem.
And according to Mark Smith, CEO and Chief Research Officer, at Ventana Research, it’s imperative that banks and insurance providers anticipate and align their business around the customer.
“This is why business analytics has become a required must-have,” said Smith. “Business analytics is a significant set of technologies that is going through a huge transformation. It now plays a key role in everyday business processes, drives improvement and helps meet customer expectations and satisfaction.”
This is especially true for today’s customers who are savvier and price sensitive, and far less loyal. Customer experience now goes a long way.
Whether its banks or insurance providers (or any industry), business analytics is forcing disparate parts of those businesses to speak to each other, share data and create a personal experience for the customer.
However, according to research from Ventana, the problem is that only 1 in 5 banks and insurance companies are using business analytics at an innovative level of performance.
Smith said that these firms either have great people with skills, but struggle with technology, or have the technology but aren’t using it to drive improvements.
“Firms need a balanced approached across these elements in order to improve their analytics maturity,” said Smith.
What is holding these organizations back from taking the next step?
According to Ventana’s banking and insurance benchmarks, only 42 percent of banks and 37 percent of insurance providers are satisfied with their current analytic process.
Smith points to three main barriers that halt analytic success:
· Wasted time due to data related activities (preparation, fixing errors)
· Lack of intersection between the business and IT (read a recent blog post on this rivalry)
· Continued use of spreadsheets that increase risk factors and contribute to poor decisions
What can banks and insurance providers do to generate better value from their analytics?
According to Smith, 68 percent of companies surveyed said the most popular use of business analytics today is in customer service. What is most interesting, however, are the least popular uses which include customer profitability, voice of the customer, marketing campaigns, communications channel usage and social media (at a lowly 4 percent).
These are the areas where the use of customer analytics can have exponential effects, and according to Smith, become a true measure of innovative maturity.
This is when the analytic process gets deeply integrated into every business process and customer touch point to make every interaction personalized.
Even the offers in my mail.
For more information:
· Register for the upcoming IBM Financial Services Online Summit (February 7, 2012 from 11:00 am – 1:30 pm ET).
· Watch videos of First Tennessee Bank and Infinity Insurance discussing the benefits and ROI they have received from using business analytics.