Can Big Data Recreate Personal Touch of Bygone Banking? RBS Thinks So
The megabank's commitment to its branches stands out in an industry where customers are shifting more of their banking activity to mobile devices and PCs, and where banks take an increasingly ruthless look at branch performance numbers.February 24
As it continues to build innovative features in its digital apps, such as its own virtual assistant and biometric authentication, USAA is trying to make a one-on-one connection with its members, says Christopher Cox, head of digital experience delivery for the San Antonio company.June 8
Some banks have begun to look at social media posts and website meanderings to better understand their customers and improve digital marketing. The practice is legal, but raises ethical questions.October 19
Christian Nelissen, the self-proclaimed “Data Guy” at Royal Bank of Scotland, wants to bring banking back to the 1970s.
Not in the sense of bell-bottoms, alligator shirts and pet rocks, and certainly not COBOL programs and mainframes. What Nelissen aims to do is bring back the type of personal relationship customers used to have with their local bank branch manager, albeit through data analytics. (His official title at the bank is head of data and analytics.)
“The bank manager was someone who really cared about you, he wasn’t just there to make more money from you,” said Nelissen, who is based in London. “I’m trying to hark back to that time when the bank manager made a difference in the community.”
In trying to use Big Data to build stronger relationships with customers, RBS is taking a path also being followed by U.S. financial institutions, including USAA, Citi and Wells Fargo, all of which are building omnichannel analytics that, among other things, hand data from one channel (such as mobile) to another (such as the call center). The goal is to create a consistent experience for customers no matter how they interact with the bank.
Can an analytics engine really bring warmth and trust back to customer relationships?
“We have more information about our customers now than we’ve ever had,” Nelissen said. “Customers do more with us, we see more transaction activity and we know the detail of a lot of transaction activity. We see them spending money, we see them online. And we still have conversations with them and we can capture conversations.”
The analytics engine RBS is building, it is hoped, will identify appropriate times for customer conversations. Not just to sell them products, but to help them, for instance, when they’re struggling with an online application.
U.S. banks tend to comb through transaction, social and other data for “life events” – signs that someone is about to buy a house, get married, have a baby or do something else that might trigger new financial needs.
RBS takes a different angle. The bank looks for very small things that are meaningful in customers’ lives, seeking to make a connection rather than push a product. It sends messages to customers on their birthday. It finds instances where they’ve paid for something twice, and lets them know. Employees call customers when they see the customer could be borrowing at a lower rate than the one they’re currently getting from the bank. They notify customers when they’ve walked away from an ATM without taking the money (this happens about 500,000 times a year to bank customers, believe it or not).
“If the bank manager in the '70s saw you doing something they thought you could do better, they would tell you,” Nelissen noted. “We call the customer. We want to get out in front of customers.”
Sometimes customers come back to the bank when they are ready to buy a new financial product, because of a pleasant conversation they had with a banker.
“A private banking manager rang his customer on his birthday and two weeks later, the guy rang him up and said, ‘I’m about to switch cars, I want you to do the lease,’ ” Nelissen said. The manager pointed out that the customer had always gotten his lease straight through BMW. “He said, ‘Yes, but BMW didn’t ring me to wish me happy birthday.’ ”
In another use case for analytics, the team analyzed call center data to find the top five things customers struggle with in online banking. Then the bank adjusted the website to fix the problems.
To analyze structured data, the bank uses software from Teradata, SAS and Informatica. For unstructured data it uses SAS, Cloudera, and Trifacta. Software from Pega helps Nelissen’s team make decisions based on the data.
Despite his obvious passion for data and analytics, Nelissen says he doesn’t get excited about technology. “I run a people business – my biggest job is getting smart people who can convince other people to do things differently,” he said. “The technology is an enabler for that.”
Where a lot of banks struggle to get a single view of the customer because of disparate customer identifiers, Nelissen said this is something his bank has solved.
“From an analytical perspective, if you’re a customer, we know who you are, we know where you live, we know all your accounts, all your transactions on all your accounts,” Nelissen said. “If you use online banking, we see you online. We keep track of what you’re doing online, including complaints. We join up all the data to help you out – not to try to spy on people, but to know better what’s going on.”