Stuart Ward, Director of Market Development of Financial Services at Qlik APAC. Credit: Qlik
As the world heads towards digitisation and competition in the financial sector heats up, financial institutions are forced to leverage analytics to differentiate themselves. Stuart Ward, Director of Market Development of Financial Services at Qlik APAC, shares with us how financial services institutions could effectively use analytics to gain new customers and garner customer loyalty.
How has analytics for the financial services industry evolved over time?
The financial services industry has long been heavily invested in analytics. Underlying drivers of revenue, risk and efficiency are not new motives — rather, it has been the pace of market evolution, competitive environment, interconnected risks and regulatory backdrop which are driving a new level of appetite for analytics.
With more financial systems and customer interactions becoming digitised, market participants are increasingly aware of their new form of capital: their data.
Participants at the forefront of analytics can create actionable insights by linking data both across their organisations and through external sources like social media. However, the ability to create actionable insight depends on the delivery of these insights to the workforce — they should be delivered via simple interfaces, where the everyday decisions are made. By doing so, participants are supporting a culture of collaboration and continual improvement.
It's quite common to hear experts claiming that data and analytics could be used as a differentiator for financial institutions. Could you share the specific benefits these organisations could potentially gain by implementing big data/sophisticated analytics?
The financial services industry is becoming increasingly competitive and costly, courtesy of a swath of new regulations aimed at strengthening the financial system following the financial crisis in 2008.
Adding to this is the rise of product aggregator businesses — these are arming consumers with unprecedented transparency into product information and comparisons, and lessening an individual firm's position as the default option for a customer. All of these are further placing downward pressure on margins in an effort to reduce churn.
Financial services, though, provide their customers with products to assist them through life's milestones. Participants at the forefront of analytics don't simply employ analytics internally to help "push" more products to their customers; rather, they provide their customers with an "analytical mirror".
This helps the customer understand their current position, goals, and provides a pathway to help them through life's events and stages. Such a use of analytics breaks down the information asymmetry.
While the industry has used the advantage of knowing more than its customers to protect its margin and market access, players should instead provide consumers with more insights, thereby earning loyalty through partnership.
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