Thursday, November 02, 2006

I'll have some intelligence with my data

For many years (some may argue it still is) banking was all about products, locking the customer in for life to a particular bank's you beaut online cash management application or securities servicing offering.

Ultimately, however, customers have come to realise that as the business of banking (moving money and securities around) has become commoditised, a lot of these 'you beaut' banking products all start to look the same; they all provide similar levels of functionality, albeit packaged perhaps somewhat differently.

The banks however have been a lot slower than the customers to cotton onto this. In fact, a constant gripe of corporate customers is that banks still continue to push proprietary solutions at them.

The real value for the banks is not their products, they are unlikely to admit that though. It is difficult to picture a candid banker telling a corporate customer, 'Well actually our products are mediocre, but hey our mining of customer data and how we leverage that to provide you with a better level of customer service, is amazing.'

I would maintain (that is perhaps why I am not a banker) that more banks should be having conversations like this with their customers. Banks go on a lot about how much data they collect about customers, their transaction histories. But few banks are leveraging this data in any meaningful or value-added way.

There are many reasons for this: legacy technology investments which means a lot of this data is stored in silos in different departments that do not talk to one another. It is the good old integrate your silos argument. However, the banks are not going to be able to use that excuse for much longer as a lot of the hype and promise around service-oriented architectures, data mining and customer intelligence becomes reality.

Let's be honest though, whilst banks are large users of technology and large portions of their businesses are wholly reliant on it for their everyday operations, banks have not fully grasped the real potential of intelligent and media rich IP-based technologies.

The analyst community predicts that rich media applications such as video and broadband connectivity will add a new dimension to data aggregation and management.
To some extent online sites like Amazon have given us a taster of the potential for gathering customer intelligence via the web and then regurgitating it back at us in the form of personalised information and book or DVD selections based on our buying history. Increasingly, the internet is becoming an experience that is not only interactive but tailored to our specific tastes and interests.

Why can't banking be like this too. I am not talking about simplistic banking applications that customise data pertaining to a corporate treasurer's most recent transactions or their global liquidity position. Some banks may argue it is difficult to drill down into legacy systems and provide this level of information.

However, the banking experience in general is nowhere near as interactive or engaging as it could be. It doesn't really leverage any of the intelligence that banks gather on their customers, to provide an experience that is not only richer but tailor-made to suit a particular customer's needs, whether it is buying FX, selling securities, or transferring money half way round the world.

Isn't it time that banks actually started doing something intelligent and clever with all the information they gather on their customers, customised down to the individual or group level, rather than trying to flog to customers the latest ubiquitous banking application?

No comments: