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financial services data silos

There are all kinds of reasons companies are changing their approach to data management—and the customer experience is as powerful as any. You may ask, “What does data management have to do with our customer relationships, let alone their perception of our brand?” Quite a bit more than you think, actually. Customer data—or more precisely, what you do with customer data—can help make it or break it in today’s financial services marketplace. If your customer data isn’t being managed effectively, it’s simply not going to be very useful to you. And it sure isn’t going to enable you to deliver more engaging (and profitable) customer experiences. Isn’t that what you want to do?

Let’s take a look at why financial services companies are shifting away from traditional, silo-based data management and paving the way for friendlier, all-data-welcome paths to customer success.

The Trouble With Data Silos

When a system, its users and its processes operate in isolation from other systems, its data is equally isolated. It’s disconnected, out of sync with other company data, and generally not available to the broader business audience. The data is “all dressed up with nowhere to go” except for a system-specific report or an Excel spreadsheet. This might have been sufficient yesterday, but in today’s digitally driven world, data silos represent untapped potential and a host of opportunity costs.

It’s easy enough to understand why data silos exist and why they’re so hard to break out of, especially for companies in highly regulated industries with strict security and privacy controls, complex and often disparate data sets, and very expensive and customized legacy systems that were developed before anyone wanted to connect data in the first place. But what’s important to grasp is that indeed, there are ways to get your company’s data out of silos and into systems and applications that make glorious use of it.

Most financial services companies have already taken their financial and accounting data out of silos and into data-sharing technology environments, such as cloud-based ERP systems like those offered by NetSuite or Sage Intacct. They’ve either completely replaced their on-premise legacy systems or have invested in tools (e.g. custom integrations or dashboarding software) that bring data together. By giving their decision-makers access to real-time, 360-degree views of their financial operations, they’re reaping the benefits of process optimization, stronger vendor and customer relationships, and cost-savings. In other words, they’re successfully embracing big data. But isn’t it time to embrace the unification of consumer data, too?

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Tapping Into Your Customer Data—All of It

When it comes to delivering that all-important customer experience, it’s essential to work with a 360-degree view of each customer. You need to know who they are, what makes them tick, what they need, and how they want to get it. You won’t gain such comprehensive “access” to their identity as a customer without a wealth of data—data that’s already sitting (probably siloed!) in your CRM application, email software, POS system, and other internal and external sources. Yet there are two compelling reasons to bring your customer data together in one place:

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  1. It can empower your company to deliver the kind of personalized, customer-centric digital experiences your customers have come to expect.
  2. Your competitors are already doing it—and they’re the ones driving consumer expectations.

These two points can be tackled together. Disruptors in the various financial services marketplaces (from personal banking to insurance to cryptocurrency) have a customer-first mission and mindset that drives their technology adoption and use of data—and vice versa. New entrants are at an advantage because they don’t have legacy architecture to overhaul, and if they start up with flexible and highly scalable cloud computing environments, they come out of the gates meeting consumer preferences for easy-peasy technology and budget-friendly product and service prices.

In fact, in Financial Services Technology 2020 and Beyond: Embracing disruption, PwC asserts that FinTech will drive the new business model. They explain that successful disruptors who focus on a particular innovative technology or process typically “offer a better customer experience and greater convenience at a much lower price.”

The underlying message is that in order to provide customers with the personalized experiences they’re coming to expect, legacy players need to change their approach to customer data management so it’s on par with what the disruptors are doing. While it’s important to use the data to inform strategy, it’s essential to use the data to shape customers’ digital point-of-engagement interactions with the company. If they don’t, it’s far too easy for customers to move their business elsewhere—to new entrants or, perhaps more disheartening, to more innovative incumbents.

Rising to Customer Expectations Like the Other Guys

You have all the insights you need to delight your customers with satisfying digital experiences—you just need to leverage your data effectively. That means taking it out of silos and putting it to work behind the scenes of a powerful personalization engine. With the right technology in place to track each individual customer’s activities on your website or mobile app—and then combine it with all of your other customer data—you’ll have the power to deliver personalized experiences across channels, in all of your digital marketing efforts.

For example, if a customer is browsing your insurance site, you can recognize that he is researching auto insurance (from his behavior on the site) and that he has been a long-time customer with a home insurance plan (from your CRM system), and use that information to understand that he is looking to bundle home and auto insurance. With that knowledge, you can help him in a number of different ways. The website can guide him in real time to information about bundling. You can send him a triggered email to tell him about the benefits of bundling home and auto insurance with your company. A salesperson can reach out to him to help him save money on his auto insurance.

Providing your customers with this highly personalized level of service—service that solves their particular challenges and drives them toward more engaging and profitable experiences with your company—simply isn’t possible without behind-the-scenes data intelligence. And the data intelligence just isn’t powerful enough if it comes from one or two disparate sources. It’s the unification of all of your customer data—and its marriage within a personalization engine—that delivers the value and the experience your customers are looking for.

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