Predictive Analytics in the Financial Marketplace

Retail banking in recent times  focuses on enhancing the experience of their customers and fulfilling their aspirations. Financial institutions have multiple tools abundant to accomplish their goals of meeting their customers’ expectations through data generation and analysis. The industry is at a point where they need to utilize data to satisfy the needs of their customers and gain trust from potential consumers.  Predictive analytics shows the available sources of data, it examines the state of marketing analytics, techniques being applied and also the effect digital interactions with customers will have for growth and change for the future.

With the large amount of data financial institutions have the ability to collect and store, it is important to decide which data is important to make strategic decisions that will lead to growth and profitability for the future. The digital world is an important asset for financial institutions that can be used to engage with consumers interacting with their needs, aspiration and goals also to see their spending patterns. Financial institutions will need to take a number of marketing trends into consideration whilst moving forward. These include; competitiveness through digital engagement, focus on improving operational efficiency, potential and present consumer behavior also their expectations.

Customers presently interact with financial institutions through numerous channels which works positively especially for the banking sector because it provides insights into market trends and change in consumer behavior. This will enable these institutions to create better products also to personalize them to fit customers need and can increase revenue while decreasing cost. Satisfying your customers can be attained through predictive analysis, because insight gained will help in formulating ideas that will pull more customers towards the organization.  The good thing about analytics is that it provides an opportunity to anticipate customers’ needs by looking way ahead in are always trends the future.

A solid foundation is needed to utilize predictive data i.e. the right information and analysis is needed for there to be effectiveness. Consumer behaviors and trends are no longer analyzed using traditional marketing techniques but are done through the use of social media and different data sources. Data from all sources are important to strategies for the future.

·         Social media -provides insight into behaviors and life events.

·         Mobile phones -show the preferred apps used by consumers and enables financial institutions to deliver solutions through the correct channel.

·         Bill payment -behavior allows an institution to have an understanding of how payments are made and to whom. This will enable improvement in payment services and also converting a customer from their current payee which will result in a larger market share.

·         Financial priorities- give an understanding of the financial goals of a customer which will help the organization in formulating different wealth management packages to help them succeed financially.

·         Location identity- helps to find new target areas of opportunity to provide services. Marketers can get more insight on where they can deliver more solutions based on a person’s location.

All of the above mentioned falls under the umbrella of predictive analytics because they represent areas where important data can be attained and the opportunities that can help to implement changes with the intention of satisfying the needs of consumers.

Predictive Analytics will play an important part in the future of marketing for financial institutions, having the ability to predict a customer’s life changing event or any other financial service need is definitely an asset. High level of predictability to satisfy a customer’s need will gain their trust and loyalty and in return set an organization apart from its competitors. Competing at any level in today’s marketplace has become very difficult and the right tools and skillset are required  to keep a competitive advantage.