It doesn’t look like 2013 is going to be a breakout year for most of retail banking. According to a recent report by Banking Strategies, A Look Ahead to U.S. Retail Banking in 2013, the coming year looks like it will be a replay of 2012, with less than favorable market conditions for strong growth.
With continuing low interest rates, new regulations that increase operating costs and sluggish employment growth, retail banks are looking to cut costs and generate internal growth by increasing revenues and profits from existing customers. This means that banks are going to spend the vast majority of their time in 2013 attempting to cross-sell to their customer base.
Here lies the challenge. Customers are taking greater control of their banking relationships. Loyalty really doesn’t matter if the customer is being underserved. They are switching banks, changing their behavior and demanding improvements. Increasing profitability per customer requires a deeper understanding of your customers and the value they represent to your bottom line.
It’s one thing to uncover some facts about your customers after they’ve already procured your services. But think of how powerful it could be to gain real-time insights into prospects and understand which products and services they are eligible for – automatically pre-qualify them – so that cross-selling becomes a very personalized banking experience.
What I find interesting is how many retail banks don’t really understand the value of customer analytics. The results of a new study conducted by American Banker Research are telling. 71% of the 170 bankers in the weighted survey do not use customer analytics with only 6% of the non-users planning on buying analytics in the next 12 months. 33% of the bankers that do use analytics plan on increasing their spending in the next 12 months with 28% claiming said that anincrease in wallet share was the top benefit their institution reaped from customer analytics.
So, what are you waiting for?
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