Banks face more competition from more directions than ever, with their toughest opponents often newcomers focused relentlessly on a digital customer experience. These newcomers also lack the legacy technologies of traditional banks, which has allowed them to be fast-moving and customer-centric in a way that many legacy financial institutions have lagged. This is despite the reality that most senior-level bank executives would probably agree on the need to deliver a differentiated omnichannel customer experience – despite their lack of ability in doing so.
Traditional banks looking to transform the customer experience have a key advantage compared to most brands: access to vast behavioral, preference, and transactional customer data. In fact, banks operate at a unique nexus of insight because they see a much broader transactional history than any other organization.
This wealth of data isn’t enough. If it were, banks would have already excelled at delivering a contextually relevant customer experience. The problem is one of identity. Specifically, an identity resolution strategy and tactics that allow banks to recognize consumers from anonymous to known, across channels of engagement. These capabilities are crucial for banks looking to deliver an engaging omnichannel experience in the ever-increasing digital landscape.
Identity resolution means linking each interaction to the right individual, eliminating duplication, and associating that individual with all the contacts they’ve made, regardless of the online or offline identifier they’ve used. Banks have used these capabilities for years, but often in the context of compliance with anti-fraud and anti-money laundering policies such as Know Your Customer (KYC). In those contexts, resolving a customer identity is more about ensuring the right person is making the transaction and not about contextual relevance in marketing messages.
Identity resolution capabilities, well deployed in the organization, have value far beyond complying with legislation. You might be familiar with classic tools for merging-and-purging duplicate direct mail or email. That’s not what I’m talking about. Customers and prospects now arrive through many channels, and identify themselves in many ways (or not at all). The same individual may use multiple names, email addresses, social media handles, and multiple devices — not all of them obvious. He may be email@example.com, @joemonster on Twitter, Jim Smithson on Facebook, and cookie 1234 on the banking site, with still other identities presented by his smartphone, his PC, his tablet, and even IoT devices such as an Apple Watch. He may visit your website anonymously, leaving traces you’d love to connect with a specific human as soon as possible.
Advanced identity resolution can do that, because it relies on big data and machine learning algorithms to leverage probabilistic methods that go miles beyond the simple rules used in “merge-and-purge.” The identity resolution capabilities of solutions such as a customer data platform (CDP), involve linking the different pieces of a customer’s identity based on persistent keys. A retailer could use an email address, a bank could leverage an account number, and so on. The point is tying each interaction, regardless of channel, to a single golden customer record.
A “golden customer record” is a unified profile that combines all that is knowable about an individual customer, including behaviors, preferences, interests, and purchases, from multiple engagement systems and data sources into a single, 360-degree view. This unified record consists of accurate, complete, and timely data on a customer that persists over time and is continuously updated with detailed data from batch and real-time streaming data sources. This unified record is a key component in hyper-personalizing customer interactions, as well as privacy compliance, and improves competitiveness through greater insight into customers.
By applying advanced identity resolution, you’re far likelier to get your prospect’s identity right from the start. As your relationship matures, you gain greater confidence that multiple IDs are the same individual. This helps you compete more aggressively, offer better pricing, and invest more in customer service for certain customers, because you know more about their behavior and value.
For example, you can improve the accuracy of your credit scoring to compete more aggressively for new business. If you can link a prospect to a high-affluence ZIP code, and match her identity to the owner of a jumbo mortgage with another bank, you have more confidence that she’s a high-quality credit risk. Now, you can offer a more competitive mortgage rate when she purchases her next home.
You now have better risk profiles for optimizing service bundles and offering strategic pricing to current customers who warrant it. You can refine how you slot customers into service tiers, bumping the right individuals up to “platinum” and targeting service investments where they’ll deliver the highest return. You can discover each customer’s communications preferences even when they haven’t told you, and reach them the right way at the right time.
In short, you have a powerful strategic tool for customer acquisition, growth, retention, customer care, winback, and omnichannel marketing for better customer experience. If you’re a bank executive or marketer, what could be more exciting than that?