5 Ways MDM Makes Banks Smarter
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Jennifer McGinn explains how MDM can make banks smarter
The banking landscape is changing – not only in terms of growth and opportunity, but also due to complexity and competition. Growth naturally leads to mergers, acquisitions and the need for competitive advantage.
As recent headlines attest, banks face sizable cost, capital, liquidity and growth challenges. Meanwhile, their competitors see opportunity. So how do banks meet these challenges while staying ahead of the competition?
Some banks are finding great success by leveraging information as a strategic asset. Doing so also helps achieve compliance with ever-increasing regulations.
So what kinds of benefits are banks gaining from MDM? Companies we are working with are improving business processes, creating efficiencies and enhancing decision.
1. Increased Wallet Share
By gaining a better understanding of their customers, banks are better able to identify cross-sell and up-sell opportunities and identify unique and high value customers. This empowers customer service representatives to provide customized, relevant offers at the point of service.
While this is basic customer service, it’s incredible how many companies haven’t mastered this yet. Have you ever received multiple mailings from the same company? One US bank shared that they were able to identify a 10% customer duplicate rate in customer data and reduce that to less than 1% - ensuring efficient and targeted mailings.
2. Better Customer Service
Similarly, recognizing a customer across multiple systems is very powerful for delivering better customer service. Especially in banking, where numerous mergers have occurred over the last few years, it’s not unusual to have the same customer represented in different databases.
Identifying households among your data and linking together data from the same individual can help provide a consolidated view of all their products or services. This makes the cross- and up-sells mentioned above more relevant.
Your customer is more satisfied, too, as customer service agents have all the details they need to help. Customers can also have a consistent experience regardless of how they interact with you: in person, online, or via phone.
3. Reduced Costs & Operational Efficiencies
Streamlined customer information processing, client on-boarding and new account set up lead to big operational efficiencies. Banks that consolidate records can eliminate duplicate mailings and stop sending glossy brochures advertising products customers already have or use. All of this saves money.
4. Improved Risk Management & Risk Assessment
With a consolidated single view of customer credit and accounts, banks can make better credit and lending decisions and reduce the risk of fraud. Household views and other hierarchies can also aid banks in understanding the total risk of credit or lending decisions.
5. Achieve compliance
Given the financial crisis of the past few years, banks now face increasingly tight regulations. A consolidated single view of customers enables accurate and timely reports required for regulatory compliance.
Additionally, as customers become more concerned about their privacy, MDM can help banks manage customer privacy preferences and privacy across multiple channels.
A leading provider of credit cards leveraged MDM to consolidate 8 systems to establish a single view of their customers and their privacy preferences. Customers can now have more faith and trust in the companies they chose to do business with.
Learn more about IBM InfoSphere MDM for Banking. And register for our upcoming June 23 webcast, MDM: Strategies to Help Banks Drive Business Agility.
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