Young entrepreneurs cooperating while going through paperwork in a modern office. Their colleagues are in blurred motion.

3 ways consumer insights can give lenders strategies to bank on

Jason Martin

Principal, Banking and Capital Markets, Business Consulting, Ernst & Young LLP US

3 minute read 01 May 2024

Is your financial organization changing fast enough to meet consumer expectations? Data insights can make the difference.

In brief
  • Banks and financial organizations need to accelerate their D2C strategies, like other industries, to stay competitive.
  • Personalizing consumer experience has moved from branch to handheld apps – and requires a new kind of data insights to manage and curate at scale.
  • Consumer insights can streamline operations and have a positive impact on the bottom line.

Many of the nation’s top financial institutions are more than a century old. While that’s impressive resiliency, the future is by no means assured – and financial leaders should be asking themselves one critical question: are we changing fast enough for today’s consumer? Industries like retail, technology, media and telecommunications have embraced the accelerated boom in e-commerce and digital-first experiences that consumers now demand. But in banking and finance – where operations have balanced a historical focus on physical branches, expensive legacy technologies and regulatory oversight – making the critical switch to a direct-to-consumer strategy may seem like an enormous lift for lenders. To add to these complications, financial institutions are also faced with consumer privacy concerns, first party data limitations and an increasingly competitive speed to market. Financial leaders have a full plate to plot growth for the next year, let alone to maintain another century of relevancy. But change is now afoot with new, more agile solutions to help organizations access rich, data insights that can be turned quickly into actionable strategies for improved consumer experiences, better compliance and greater efficiencies. Here’s how.

How EY can help

1. Invest in insights-based solutions to better understand consumer change at scale

 

Most consumers now assume every digital interaction will give them three things: mobile convenience, a frictionless experience and immediate results. This expectation arrived in the banking sector over the past few years and created one enormous implication: the need for vast amounts of consumer data – plus the ability to understand it quickly, effectively and at scale. To distinguish your products and offerings, data-rich consumer insights are now essential to create exceptional experience-led consumer journeys in a sector awash with digital distractions and increasing competitor options. Understanding shifting consumer expectations starts with addressing two critical questions:

  • Do I really know who my consumer is and how each of them acts?
    Recent EY research shows a marked generational shift in consumer behaviors and the experience they each require. For example, Gen Z engage more with products like a bank’s digital payment platforms, spend more time on profile and insights pages and leave less feedback compared to others. In stark contrast, baby boomers leave 78% of their experience responses online vs. in-app.
  • Does my data help me understand consumer experiences?
    Almost half (48%) of consumers say they will spend more on better experiences, but too many financial organizations lack the data clarity to accurately track these evolving preferences and action the strategies to meet them.

 

2. Personalize experiences through insights to build true loyalty

 

Most financial organizations gather an enormous amount of data on customers across online interactions, app use and e-commerce platforms, but often fall short of drawing the actionable insights needed to set strategies for change in their businesses. There are many influencing factors: disconnected technology tools that don’t speak well to each other, too many manual processes and legacy platforms that can’t deliver the agility needed for more customer-centric operations. New insights-enabled tools can change all of this, of course, in two important ways:

  • Use of key performance indicators to measure and analyze behavioral changes
    Banks have a long tradition of personalized services at the branch level, and as that in-person model shifts, that need for personalization doesn’t go away. It intensifies. Use diagnostic insights tools that employ KPIs across products and all channels to measure and quantify your consumer experience. This includes things like app vs. browser completion, completion vs. exit variables, ease of use ratings and consumer participation in open text and chat.
  • Use of smart customer segmentation insights to drive strategies for different demographics
    If aging boomers spend more time online with your products, do they need simpler navigation or a virtual assistant to help? How do you socialize your offerings to further engage Millennial preferences? Or increase self-service choices and mobile options for Gen Z? Knowing all of this, plus the sizes and other behaviors of these customer groups, allows you to hyper personalize experiences and allocate resources to better target changing customer purchasing patterns.

 

3. Use insights to find efficiencies that reduce cost-to-serve

 

Understanding consumer perception, motivation and behavior patterns can have a direct impact on your bottom line and organization-wide operations. By listening and analyzing experience factors, financial organizations can be more proactive in meeting specific customer needs. Using insights to pinpoint areas of frustration and then reducing friction, improves customer satisfaction, encourages repeat business, and adds to the streamlining of operations in an organization’s cost-to-serve. In turn, those satisfied customers improve employee morale and sense of worth, helping retain talent which lowers turnover and recruitment efforts. Deploy insights in two key ways across your organization:

  • Develop a unified ecosystem with one view of consumer journeys
    Match the mission and values of your organization with actionable strategies to effect the changes to get you there. Define a single, holistic view of your brand to empower and guide smarter, on-brand, decision making and comprehensive storytelling across apps, web interface and things like call center customer relations.
  • Deploy dynamic, data-rich insights to inform and measure every strategic action
    Monitor consumer, employee and market behaviors and analyze for the insights that can help you stay ahead of evolving consumer trends and growth opportunities.

 

As banking continues to be driven by escalating consumer demand for improved experiences with your technology, products and brand, it’s going to become impossible to change at the pace and scale required for success without true, data-rich insights. They’re the answer to unlocking the strategies and change to propel the financial industry forward toward the next one hundred years.

Summary

Modern banking is in the hands of the customer. Consumers increasingly demand mobile convenience, personalized experiences with their lender and fast outcomes. All of this amid restrictions on first-party data gathering and consumer expectations over privacy.

Do more with your data and access powerful insights that make your financial products and offerings stand out in an ultra-crowded marketplace.

About this article

Jason Martin

Principal, Banking and Capital Markets, Business Consulting, Ernst & Young LLP US

Veteran of the Financial Services industry, with over 20 years of experience in Consumer Banking as part of large financial institutions and consulting firms

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.