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"Digital is one of the lightning rods for big data," says Tom Kunz, senior vice president of digital at PNC Bank.
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Mobile Devices Burying Banks in Data

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Banks have long struggled to make sense of the reams of customer data they collect across product lines. The rise of mobile banking is making this task even harder.

The industry now has a litany of new data points to process. How many customers interact with their bank via the web browser on the mobile devices compared to those who use an app? How frequently do customers log into a bank account through their smartphones? How much time do they spend there? Are consumers completing the tasks they set out to do on their mobile phones or tablets, or are they giving up in frustration?

All that comes on top of the metrics banks have tracked for decades, such as customer satisfaction, use of ATMs rather than tellers, and service outages at branches or on websites. The impetus to correlate and crunch the numbers is stronger than ever.

"Digital is one of the lightning rods for big data," says Tom Kunz, senior vice president of digital at PNC Bank (PNC).

The goal of such analysis is to make the banking experience more intimate for customers.

"We need to understand the trends to understand customer needs," says Marc Warshawsky, senior vice president of digital products at Bank of America Corp. (BAC) "We want to understand how satisfied customers are with the experience."

That objective requires the bank to look at metrics across digital channels, Warshawsky says.

Measuring personal finance management activities is among the newer categories banks offering the service monitor. "How you track, measure and monetize PFM is a new dimension to digital," Kunz says. The functionality, which typically includes account aggregation capabilities and budgeting abilities, challenges banks to rethink conventional industry wisdom on session length. Simply put: the functionality may give users an incentive to pause and a longer session time could be a healthy indicator.

As the internet continues to evolve into a sales channel for banks, financial institutions must also pay attention to buying indicators for the so-called omnichannel encompassing all interactions with a bank, from in-person to digital, says Kunz. Tablets, for example, are widely known as "couch devices," and are regarded as having a bigger impact on the sales funnel than smartphones.

The emergence of the smartphone in the mid-2000s complicated the ways banks monitor and measure data, says Andres Wolberg-Stok, global mobile and tablet banking director for Citigroup's (C) global consumer bank.

Data Citi monitors, like other banks, evolves as new form factors and operating systems emerge. Tracking swipes and scrolls in addition to clicks is required of banks, for example. "You continue to find things to unpack," Wolberg-Stok says. "If you go back in time five or six years ago, it was so much simpler."

As consumers use multiple devices to execute financial tasks, banks are forced to evaluate how mobile trends impact other touch points. Generally, banks report digital customers have lower attrition rates and deeper engagement.

Deciding what to measure remains an art. "You can't know from the outset that you are focusing on the right things," he says.

Keep Measuring
Marketing experts recommend banks keep finessing the ways in which they measure digital interactions. Jim Marous, senior vice president of corporate development at New Control and author of the Bank Marketing Strategy blog, urges banks to focus on improving the customer experience and delivering against key performance indicators.

"While initially, most banks were focusing on getting customers to sign up for mobile and online banking, the business case for the channels requires much more than simply a base of customers since most digital banking is an expansion of channel use as opposed to a channel replacement strategy (which many banks were sold on)," writes Marous in an email. "This delusion has made some banks step back and reanalyze their performance metrics before they expand into a tablet strategy."

A Forrester Research report published in June found digital banking teams overlook more complex mobile metrics and analytics, such as impact on customer retention or sales. Banks are "doing fine" but there will come a time when fine won't cut it, says Peter Wannemacher, a senior analyst at Forrester and author of the report.

Two banks, which Wannemacher declined to name, are testing what he deems as interesting metric-related mobile projects. One bank created a dashboard to track mobile-only bankers to uncover behavior patterns, while another firm is investigating whether customers paid for a mobile banking service out of need or convenience. To ascertain this, the bank is using mobile analytics to identify time of day and the customer's location when he conducts the transaction.

That's atypical of the industry.

"This is not a good or bad thing: Banks start by measuring what's most accessible to them," says Wannemacher.

What measurements work in mobile can often be modified and applied across all digital channels. "It's very similar," says Brian Pearce, senior vice president, head of the retail mobile channel in the digital channels group at Wells Fargo. & Co. (WFC)

Wells Fargo measures whether a customer logs in at least once within a 90-day period to deem him active. True of its online banking. True of its mobile banking.

The bank seeks out customer feedback to complement those numbers. "We're interested in the voice of the customer," says Pearce. "Numbers only tell part of the story."

Furthermore, a bank's channels are not meant to battle. "Our customers choose Wells," he says. "You're not competing with your own channels. Channels should complement one another to help customers."

Such misguided competition harkens back to the late 90s when companies were trying to steer customers online, a strategy known as "clicks versus bricks," Pearce says.

His point underscores how consumers channel-hop to complete transactions, a behavior that challenges banks to understand how digital channel activity influences physical transactions. The dream of knowing when digital-related activities yield branch sales and service deals remains elusive at best. A person may research a product on a smartphone and then take out the loan at a physical branch, while a bank would remain clueless.

"That is the holy grail of digital customer management and possibly the hardest thing to achieve," Citi's Wolberg-Stok says.

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Comments (1)
This is a good article. I hope companies that provide services to financial services read this so that can see that they must provide as much data as possible to their clients. Not all technology providers do and that is a shame.

"Wells Fargo measures whether a customer logs in at least once within a 90-day period to deem him active. True of its online banking. True of its mobile banking." I do not recall ever measuring 90 day activity as an active customer in any industry I worked in. It was always measured in active categories. For example active in the last 30, 60, 90 days etc or 1 month, 3 month, 6 month actives etc. When it comes to the internet customer in financial services I have pondered what the time frame for an active internet/mobile customer should be since people like that as a reference. I thought 30 days maybe too short of a time frame. I wonder what others use?
Posted by @dmgerbino | Wednesday, August 14 2013 at 3:53PM ET
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