UNDERSTANDING YOUR CUSTOMER: HOW FINANCIAL INSTITUTIONS CAN GET IT RIGHT

By Karen Kelly, Client Partner Lead for Financial Services at CACI

Karen Kelly

Over the last 30 years the financial sector has been inundated with changes and demands that have altered the way we bank significantly. Consumers’rapid adoption of mobile banking, the decreased use of local bank branches, and the volume of legal changes all contribute to the new financial landscape banks and building societies are managing today.

Almost all consumers need a bank account, and this means financial institutions will always be under pressure to provide services to a wide variety of people. It will come as no surprise to the banking sector that each customer handles their account differently, and this can be due to a range of factors from age to technology adoption. However,for financial institutions, understanding what consumers want as they grow up in the digital age, or grow much older, can be challenging.

By analysing customers and their behaviour, financial institutions such as Nationwide Building Society can not only provide a better level of customer service, they can also ensure that relevant products are being suggested at the most appropriate time. This can be as simple as understanding that when a customer applies for a mortgage, they may want home insurance – or as complex as suggesting that once they hit a point in their career they may want a credit card.

CACI, who specialise in consumer profiling, know that customer understanding is key for businesses who want to better serve their customer base. Having recently worked with Nationwide Building Society to help them develop their customer segmentation, CACI were able to assist Nationwide Building Society in ensuring their customers have a tailored experience offering products appropriate to their life stage and financial position, and much more.

Unlike banks, Nationwide Building Society is owned by its members, and as part of that, prides itself on the way it engages with its customers. The mutual status they have underpins a duty of care to serve members in the most appropriate way. To add to this, in an increasingly complex financial services environment, they understand that developing a common understanding of their members across online and offline channels is crucial.

In order to better understand their customers, Nationwide Building Society approached CACI for development of their segmentation tool bench. This meant a refreshed view of how they look at their customers, using tailored data analytics from both CACI and Nationwide Building Society combined.

Segmentation Project:

The core of the segmentation was based on customer life stage, whether this was going to university, buying their first house, or withdrawing a pension. CACI and Nationwide Building Society could then see how demands and needs changed alongside customer ‘life stage’. By choosing life stage, the analysis could be far more specific to customer needs at that moment for them specifically, as opposed to using general age which would be far more broad. Life stage also aligned closely with one of Nationwide Building Society’s key investment themes, and worked for them beyond a simple level of ‘customer understanding’.

In addition to this, CACI worked with Nationwide Building Society to identify key attitudinal dimensions. This was most relevant for analysing Nationwide Building Society’s relationship with members, and understanding whether their customers engaged with technology, were interested in personal finance matters, or were likely to turn to social media and chatbots for customer service.

CACI then took on the work of hosting workshops with key stakeholders, ensuring that senior members could contribute their expertise and experience of the brand as part of the profiling segmentation. They then put together a list of key dimensions which they wanted to measure within their customer base, before mapping out how this would look across their customers.This was then coded against a variety of other dimensions for example; affluence, behaviour across different channels, as well as attitudes. All of which were selected specifically to be useful for financial institutions and Nationwide Building Society specifically.

Using CACI data combined with attitudinal and lifestyle information Nationwide Building Society and CACI were able to provide a tailored customer view. This was in depth enough to include:propensity to engage with a brand on social media, frequency of internet use, smartphone ownership, average income,as well as a variety of other dimensions. This data ‘vocabulary’ could then be adapted to any area of the business, from student accounts to mortgages, making it a truly flexible asset for Nationwide Building Society.

Results:

Nationwide Building Society is now able to understand their individual members at a glance, and offer them the right products, services and advice to help them with their banking needs. By better understanding customers, financial institutions can provide a more streamlined and targeted level of service to all their customers.

This allows account providers such as Nationwide Building Society to better understand all of their members as individuals, rather than just assuming their needs based on age or location.

In a time when customer needs are changing so rapidly, and in a sector which is handling these changes across such an extensive customer base, offering tailored service may seem impossible. However, by investing time into understanding customer demands, and using data to streamline this by particular dimensions (such as life stage) financial institutions can create a model which works across their whole business; allowing them to see their customer quickly and accurately.

By Karen Kelly, Client Partner Lead for Financial Services at CACI

Karen Kelly

Over the last 30 years the financial sector has been inundated with changes and demands that have altered the way we bank significantly. Consumers’rapid adoption of mobile banking, the decreased use of local bank branches, and the volume of legal changes all contribute to the new financial landscape banks and building societies are managing today.

Almost all consumers need a bank account, and this means financial institutions will always be under pressure to provide services to a wide variety of people. It will come as no surprise to the banking sector that each customer handles their account differently, and this can be due to a range of factors from age to technology adoption. However,for financial institutions, understanding what consumers want as they grow up in the digital age, or grow much older, can be challenging.

By analysing customers and their behaviour, financial institutions such as Nationwide Building Society can not only provide a better level of customer service, they can also ensure that relevant products are being suggested at the most appropriate time. This can be as simple as understanding that when a customer applies for a mortgage, they may want home insurance – or as complex as suggesting that once they hit a point in their career they may want a credit card.

CACI, who specialise in consumer profiling, know that customer understanding is key for businesses who want to better serve their customer base. Having recently worked with Nationwide Building Society to help them develop their customer segmentation, CACI were able to assist Nationwide Building Society in ensuring their customers have a tailored experience offering products appropriate to their life stage and financial position, and much more.

Unlike banks, Nationwide Building Society is owned by its members, and as part of that, prides itself on the way it engages with its customers. The mutual status they have underpins a duty of care to serve members in the most appropriate way. To add to this, in an increasingly complex financial services environment, they understand that developing a common understanding of their members across online and offline channels is crucial.

In order to better understand their customers, Nationwide Building Society approached CACI for development of their segmentation tool bench. This meant a refreshed view of how they look at their customers, using tailored data analytics from both CACI and Nationwide Building Society combined.

Segmentation Project:

The core of the segmentation was based on customer life stage, whether this was going to university, buying their first house, or withdrawing a pension. CACI and Nationwide Building Society could then see how demands and needs changed alongside customer ‘life stage’. By choosing life stage, the analysis could be far more specific to customer needs at that moment for them specifically, as opposed to using general age which would be far more broad. Life stage also aligned closely with one of Nationwide Building Society’s key investment themes, and worked for them beyond a simple level of ‘customer understanding’.

In addition to this, CACI worked with Nationwide Building Society to identify key attitudinal dimensions. This was most relevant for analysing Nationwide Building Society’s relationship with members, and understanding whether their customers engaged with technology, were interested in personal finance matters, or were likely to turn to social media and chatbots for customer service.

CACI then took on the work of hosting workshops with key stakeholders, ensuring that senior members could contribute their expertise and experience of the brand as part of the profiling segmentation. They then put together a list of key dimensions which they wanted to measure within their customer base, before mapping out how this would look across their customers.This was then coded against a variety of other dimensions for example; affluence, behaviour across different channels, as well as attitudes. All of which were selected specifically to be useful for financial institutions and Nationwide Building Society specifically.

Using CACI data combined with attitudinal and lifestyle information Nationwide Building Society and CACI were able to provide a tailored customer view. This was in depth enough to include:propensity to engage with a brand on social media, frequency of internet use, smartphone ownership, average income,as well as a variety of other dimensions. This data ‘vocabulary’ could then be adapted to any area of the business, from student accounts to mortgages, making it a truly flexible asset for Nationwide Building Society.

Results:

Nationwide Building Society is now able to understand their individual members at a glance, and offer them the right products, services and advice to help them with their banking needs. By better understanding customers, financial institutions can provide a more streamlined and targeted level of service to all their customers.

This allows account providers such as Nationwide Building Society to better understand all of their members as individuals, rather than just assuming their needs based on age or location.

In a time when customer needs are changing so rapidly, and in a sector which is handling these changes across such an extensive customer base, offering tailored service may seem impossible. However, by investing time into understanding customer demands, and using data to streamline this by particular dimensions (such as life stage) financial institutions can create a model which works across their whole business; allowing them to see their customer quickly and accurately.