Zions Bank Combs Big Data for Customer Preference Clues
Banks have a great deal of data available, but lack the technology to make the most of it, a Deloitte survey has confirmed. Almost a third of banks don't even use analytics in strategic decisions because they don't have the right software.
What do Hispanic small business owners want? Zions Bank, recognizing the growing Hispanic community in Utah, has turned to analytics software to better understand the needs of Hispanic and Asian consumers and businesses in its markets.
"Our mission was to provide Hispanic and Asian communities the opportunity to have banking services and to have more access to capital on the business side," says Juancarlos Judd, senior vice president of the $53 billion asset bank, which is based in Salt Lake City.
Utah's 2012 population was 2.8 million and non-white communities comprised 20%, reaching nearly 600,000, 67% of which Hispanic. Utah's Hispanic aggregate income is projected to surpass $6 billion by 2017.
There are also burgeoning small business opportunities within this market. "Utah is a very entrepreneurial state, so by nature immigrants coming in are entrepreneurial themselves, it's a really good place for thriving small and large businesses," says Judd.
The bank has been using business intelligence software from Geospace to better understand the Hispanic market.
"You start out thinking you need Spanish language support, but it's much more a matter of identifying the needs of every consumer," says Judd.
The software helps the bank identify Hispanic consumers within its geographic footprint and see their education levels, home ownership, affluence and other factors. The bank then breaks the segment down into groups and identifies financial needs for each. "That helps us enhance our product base and know what we should develop to meet the needs of each group," Judd says.
Geoscape gathers its data from the Census Bureau, the Bureau of Labor Statistics, the Department of Labor, and other government sources. It also uses syndicated data and proprietary data and modeling.
The software has a visualization tool so the data can be plotted on a map. For instance, Zions bank branches can be viewed along with the surrounding ethnic populations, demographics, and household data, down to the block level.
The bank uses the maps to find areas to target, as well as to figure out which branches serve diverse markets. In some less affluent neighborhoods, for example, Zions provides a check cashing product that was developed based on Geoscape data. "We will offer our traditional banking products checking, savings and traditional loans," Judd notes. "But where there's a higher need for check cashing products, we offer that."
The software has helped the bank realize that texting, alerts and smartphone use is high within the Hispanic community; they're less apt to use online banking.
Zions has grown its Hispanic customer base 10-15% for the past few years, keeping pace with the broader population in its state.
The bank also targets the Asian community, and through Geoscape it has learned that this segment tends to know what products and services they want and to care deeply about accuracy and efficiency.
Gathering data about ethnicity can be delicate.
"We're very conscious of that," Judd says. "Being a bank and very regulated, we don't ask individuals, especially in lending, what their ethnicity is. That would be against the law. We're careful to provide everything in English, Spanish and other languages we have ads in Mandarin and Vietnamese. You will get people of Latino background who just want to be treated like everybody else and have mainstream banking, that's fine. The majority tend to like the fact that we're we're helping communities by offering information in Spanish and other languages."
The next step in this initiative is applying Geoscape data to online, mobile banking and ATM interfaces to best target these markets. "One thing we look at is, how do we understand customer behaviors before they happen?"