Amidst turmoil, build your own certainties
They say the only certainties in life are death and taxes. “They” obviously don’t understand life in a financial institution right now. Since the financial crisis, banks have yet to experience the financial relief they were expecting and are struggling with a lack of optimism as they look ahead over the next few years. Economic pressures, regulatory uncertainty, digital transformation, increasing customer expectations, and intensified pressure from a new breed of competition - these are the real certainties haunting those in the industry every day.
With all of these certainties causing a whole lot of uncertainty it is easy for institutions to become lost trying to figure it all out. What is the priority? Where should we place our bets? I’ve had the opportunity to speak with and to many financial institutions big and small, domestic and international. I hear the frustration and the need for something concrete to build on and what I always come back to and try to bring those intuitions back to is another certainty that they have in their arsenal – their data.
But that is something we all know about, analytics and the importance of capturing and pulling real-time insights for better decision making. The issue is financial institutions often spend all their time on the equation and doing the math – not in putting that math to work. However, the biggest challenge we see banks struggling with is how to implement analytic insights consistently, repeatably, and at scale.
Here are three certainties to look forward to when you start thinking beyond the math to the actual execution of your analytics.
- Greater focus on high value levers
Very few levers in banking are as powerful as how you price your products and services. Historical transaction data, combined with market and customer preference data, allows market-leading banks to improve their pricing processes through a deeper, empirical understanding of customer’s demand and price elasticity. Across deposits, lending, and mortgages, this is one of the fail-safe profitability levers bankers have at their disposal and the majority of the top 50 banks in North America have now deployed price optimization to drive incremental market share, profits, but also improved customer and employee experience.
- Elevated Customer Experience
Customers have changed and so have their expectations. Consumers expect their bank to know them and to offer them products and services that are relevant, timely, and price for a fair value exchange. At the recent Banking Growth Forum, attendees discussed the changing expectations of customers and their increasing willingness to receive personalized pricing offers. Banks have made good progress in implementing price optimization and getting to more targeted, relevant, and timely offers. However, most banks still struggle with the execution of those offers. There are frequent disconnects between back and front office systems so banks must have a single source of truth to execute pricing and offers. In terms of customer experience, banks need to ensure that offers and prices are presented consistently across channels and customer touch-points. Customers want the ability to pick up and resume transactions across different channels and at different times, and they certainly don’t want to wait for exception approvals. At Nomis, a big part of our focus is on re-thinking and enhancing the customer experience as a critical component of your journey towards pricing excellence.
- Empowered Employees
No matter how good your pricing strategy, it will fail to achieve its potential if your bankers fail to present and communicate it effectively. A banker’s ability to provide moment centric intelligence at every touch point reinforces their role as a trusted, in the know advisor to your customers. Arm your employees not just with data and insights, but the knowledge, confidence and power to translate that information into the right action for their customers. At Nomis, we believe that data and technology should empower bankers to make better, more customer-focused decisions rather than replace them.
We can all agree that the industry is not going to get easier or more consistent but there are things you can control. You can build your own path for growth and create certainties for yourself and for your bank when you go beyond just the math and focus on the solution and its execution from your pricing managers hands to the fingertips of your bankers and customers.
Check out my keynote at the Bankers Growth Forum for more on how to solve your data equation – and how to make it work for your institution.