Banks Should Tap Big-Data to Keep Customers

Gagan Kanjlia has a daunting job. As senior vice president of digital bank innovation at Capital One, his task is to "make sure we're not pushed into oblivion by competition we don't even see today."

Kanjlia was one of the speakers at the Predictive Analytics Innovation for Banking Summit, presented by IE, in New York City last week. The two-day conference featured keynote presentations, interactive breakout sessions, and networking opportunities for analytics professionals in the finance industry.

Kanjila echoed a common theme at the event: that investment in predictive analytics allows organizations to gain critical business insight that can make the difference between winning customers or losing them to competitors. "Digital lifestyles are transforming our business model in significant ways, especially in the marketing arena," he told attendees at the Conrad Hotel in Lower Manhattan.

For retail bankers, he said, the challenge is to "get customers to believe in our passions and products" -- and stay a step ahead of an ever-changing technology curve to evolve their abilities to attract and retain customers. "Product considerations are increasingly shaped by digital features," he said, citing a study that showed demand for mobile banking has jumped from 7 percent in the second quarter of 2010 to 48 percent in the second quarter this year.

In addition, he said, big-data -- in the forms of social media and online ratings and reviews -- are forcing banks to rethink their marketing strategies. "Do our business models reflect how customers are influenced and being influenced?" he asked, adding that research shows about 70 percent of people are influenced by opinions online.

"Marketing is about sending the right message to the right people at the right time. But consumers are increasingly self directed." They don't wait for banks or other businesses to provide information: They simply go online to find it.

To understand what customers want -- and prevent lack of desired services or unpleasant experiences from leading them to a competitor -- banks should use predictive analytics, he urged. In this age of big-data, he noted, businesses are no longer in control: The customer is.

Bankers can use analytics to better understand their customers' "digital lifestyle quotients" -- or how they use things like social media, e-commerce, and online forums -- as well their social influence and overall attitudes toward technology. Effective use of big-data, he said, will help bankers "cross the next big chasm before it is too late."

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