Data-Driven Decision-Making in Banking

Leveraging data to inform brand experience, branch design and meaningful marketing in financial services

In today’s data-rich environment, brands are awash in a sea of information. From customer insights to market and consumer research and more, data is the water we swim in every day. But for many organizations, determining how to effectively employ available data is the elephant in the room. Realistically, many brands lack the organizational structures to turn information into usable insights and then activate it in a meaningful way. As we outlined in Building Customer-Centricity in Banking: “The volume, velocity, and variety of customer data that now exists overwhelm many organizations,” according to Harvard Business Review. As organizations move toward a more customer-centric operating model, leveraging data for powerful decision-making is fundamental.

“If your business offers digital products or services, you are probably flooded with a considerable amount of structured and unstructured data of varying units, scales and time periods,” according to Lusine Tarkhanyan, data design associate director at Method in her Medium article on designing data strategies. “It is likely your organization either collects more data than it can consume, or it struggles to interpret the data in a way that drives value across your business through new products, features, or business opportunities.” Like others, Tarkhanyan finds that data is often only employed for sales functions in organizations, an approach that inherently limits its power. 

Data Defines Experiences

We all intuitively seem to understand the relationship between data and user-experience (UX) in the digital realm. Mobile apps, for example, are designed with data to be responsive to data and output data as a result of the user interaction, enhancing user experience in a sort-of data feedback loop. Endless amounts of data are gathered, curated and activated in digital UX. But what about other types of experiences? When laddered up, data – translated into insights – ideally informs all of our brand interactions, bringing people closer to the brand through experiences. Brands that understand and activate data – not only in a single touchpoint – but across channels unify consumer experience and grow their organizations as a result.  

“Uncovering unmet needs is critical for growth,” according to Accenture in their report on the business of experience. “Yet, organizations have traditionally limited their customer insights function to marketing, using historical data and market segmentation to paint a picture of customers at moments in time.” This myopic and siloed view of data as either UX, CX or merely fodder for more sales is static and inherently restrictive. Accenture says, “Most notably, it separates people from the rich context that informs their lives, choices and needs.” What this means is that data should be the beginning of the journey to create meaning and deepen relationships, not an end unto itself. Data contextualized through the lens of human behaviors and needs-states is at the heart of all brand experiences.  

Source: Accenture, February 2021.

Data Drives Design 

Understanding how data informs brand experience is key to unleashing its power and potential, especially in the retail environment where direct interactions drive brand value. For brick-and-mortar, effectively leveraging data means knowing who is coming inside, understanding how they want to transact and creating a cohesive journey. In their design through the decades report, VMSD says, “Retailers will likely master how to effectively implement a new retail strategy for their brand and in turn continue building deeper connections to their consumers. Lifestyle branding, slow-shopping, and omnichannel strategies will continue to be highly important for the success of brick-and-mortar retail.” In banking, the branch is at the center of this brand activity, but it has evolved beyond transactions.

The focus of considerable attention in banking, the branch is where relationships are forged. According to Adrenaline in Investing in Branch Transformation, Part III: “Even as people adopted digital methods for transactions during COVID, they’ve remained deeply connected to their local bank and the relationships they have there. So, while banking must adapt to digital demands, they must also drive trusting relationships and personal experiences at the branch.” With optimization and transformation front-and-center in banking, understanding the evolving expectations for experiences is essential. And it is data that helps drive decision-making around the branch – from critical mass and market share to tiers of investment and format distribution – data is at the heart of banking’s branch network.

Data Delivers Marketing

In Bank Marketing Makes Its Mark, we addressed the role of data in marketing, especially as branch purpose continues to evolve. Juliet D’Ambrosio, senior director of strategy at Adrenaline, believes data drives smart marketing strategies that drive growth. She says, “Financial institutions have to simultaneously focus on augmenting their digital capacity, optimizing their branches AND investing in customer-centric brand and marketing messages.” As we emerge from COVID, some interesting marketing trends are growing out of an information and insights mindset. Leaning on life-stage and needs-state marketing, data-built campaigns are resulting in deeper connections with consumers where and when it matters most to them. 

Coming through numerous internal and external sources – from digital and customer data gathered by institutions themselves to market data and research conducted on behalf of brands – data is at the core of most successful marketing strategies. But not all organizations are equally equipped to take advantage of the data avalanche. According to McKinsey in Data-driven Marketing in the Next Normal, some companies are simply so overwhelmed by dynamic data that’s changing so quickly, they’ve reverted back to mass marketing techniques in the short- and medium-term. Others, McKinsey reports, “are accepting the data for the bounty it is and, rather than stepping back from precision marketing, are doubling down.” 

The report finds those who step up no matter to the daunting data are reaping the rewards. “A consumer-goods company, for example, anticipated that sales of beauty products would spike as communities eased out of lockdown,” according to McKinsey. “Marketing teams tracked reopenings on a county basis, using epidemiological statistics, municipal reporting, and traffic data to determine where to focus their media spend. These tactics drove a double-digit increase in sales.” For banks and credit unions, insights-led marketing is the most direct path to growth: “Three factors are key to effectiveness:  Reaching the right audience with the right message at the right moment in their journey.” The only way to do that is through gathering meaningful data and developing a smart strategy to activate it.

For more insights on using data to connect with consumers, stay tuned to Believe in Banking as it tracks the big trends that are impacting financial services. To develop experience-based strategies that leverage connected intelligence tools for financial services providers, contact Adrenaline’s experts at info@adrenalineagency.com or (678) 412-6903. For more information on bank branch operation in the post-COVID landscape, download the Roadmap to Reopening. Believe in Banking Logo