Banks are still in their big data infancy. Many players have created big data operations that incorporate technology, data science and analytics in search of deeper and more sophisticated consumer insights. Yet many financial institutions are finding these sizeable digital investments are not reaping the expected commercial gains, leaving senior management to question what other key ingredient is missing from this recipe.
The availability of open-source big data technologies makes the development of new products and services faster and truly scalable for big organisations such as banks. However, the barrier facing banks realise their big data potential is the lack of systematic and sustainable processes for translating and implementing insights and predictions into meaningful products and services. Until recently, these data-driven insights vanished alongside the temporary campaigns they once supported.
As with any large established organisation, there is an expectation to remain flawless and preserve one’s reputation. The reality is, the larger the institution, the less forgiving the consumer will be. However the fear of unsuccessful experimentation and reluctance to test new concepts within the banking environment is equally risky, stifling an institution’s ability to innovate and prosper in an extremely competitive environment.
The Rise of the Data Wunderkind
In order to extract genuine actionable value from banking data, institutions need to pay attention to the emergence of a new breed of Product Manager, or, as I call this rare employee, the ‘Data Wunderkind’. This new genre of data talent combines expertise and skills across six frontiers: big data and analytics, commerce, agile execution, design, digital and customer experience.
A Data Wunderkind bridges the gap between the back office and the frontline by decoding the complex algorithmic output of the data scientist into ‘wow’ experiences for the customer. Using modelling, engineering and development, the Data Wunderkind works closely with various client-facing teams to define and optimise the final customer journey. Whilst this may sound familiar to financial start-ups and adjacent fintech companies, historically, back-office intelligence would not usually filter across to the customer.
Continuous tracking of data intelligence at an individual user level and back into products and experiences is how a legacy corporate businesses can create personalised customer-centric products, on top of re-establishing the lost intimacy and trust between customers and banks.
Here at Absa, a subsidiary of Barclays Africa Group Limited, we’ve seen the benefits of this new breed of data expert through a number of large scale customer pilots that focus on providing tailored and engaging experiences across our overdraft products and credit line limit increases.
Of an initial 422,000 customers who have been part of Absa’s smart predictive SMS alert pilot―warning customers of future spending shortfalls and providing personalised options―more than 66% proactively took action following the alert to manage their payment obligations better. In a follow-up survey, respondents gave a Net Promoter Score* of +80, confirming they had found the personalised SMS service useful. In this case, the leadership and smart execution of the Data Wunderkind resulted in the creation of a ‘wow’ experience for the customer and increased conversion rates by 10x.
The Data Wunderkind and Growth Hacker Partnership
In addition to the Data Wunderkind, the current phenomenon of the Growth Hacker―a smart ‘whiz kid’ who uses creative analytical means to drive user adoption and increase customer retention―has also started to find its way into the banking space.
Absa has introduced this role in South Africa as part of our Data Products and Platforms teams to target the continent and our customer base with special focus on the millennial, who comprise the majority segment of Africa’s population. In partnership with the dynamic capability of the ‘Growth Hacker’, the Data Wunderkind can optimise product adoption across various channels leading to a boom of new data-led innovations.
The Future of Banking and Data
As banks continue to acquire the next generation of data skills from progressive players in the same space or adjacent industries, the winner will be the one who takes best practice and proof of concepts from a lab environment into a streamlined factory delivery mode.
Ultimately the role of big data teams in banks is not only to build infrastructure and platforms, or for data scientists and analysts to churn out models in the background but, rather, to generate tangible pieces of value that find their way to the customer for test, trial and mass launch.
The sooner banks roll out the secret recipe of product management across their data investments via Data Wunderkinds, the faster they will achieve their desired material returns via an increase in product uptake, improved customer satisfaction and higher Net Promoter Scores.
Typical marketing campaigns see an uplift of 2-3% to 10-30% using real time data-driven solutions. However, as per our pilots, by combining real-time data-driven intelligence with the capabilities of Data Wunderkinds and Growth Hackers, success rates can increase by a further 30%.
A true data-driven approach with optimised customer experiences across various user touch points is where banks today can witness the holy grail of connecting with their customers in new and intimate ways. It is the continuous focus on the end user throughout the data product lifecycle which will achieve the ideal benefit that all businesses strive for: A Net Promoter Score greater than 40% and customer satisfaction results greater than 80%.
Banks may not recognise it, but they have an optimistic outlook in the heated race to attract and groom the next generation of rare data talent. Possession of valuable customer and transactional information combined with their tremendous user reach for product launches gives banks a competitive advantage against tech companies and should be used as a magnet to attract the skills and expertise of the Data Wunderkind.
Their acknowledged need and readiness for investment in this new data space has not gone unnoticed. In the fight to attract the best data talent, compared to the likes of prominent tech protagonists such as Google, Netflix, and Amazon, banks offer an unmatched opportunity to lead beginning-to-end product executions which have the potential to touch a customer beyond that of minimal incremental features or functionality enhancements.
Big data has an exciting future within reach for banks, all of whom have an equal chance to join this growth and innovation journey. However, it all starts with deep focus on attracting the right new data talent to ensure maximised returns from their major digital investments.