Banks are increasingly tapping into customer data for personal marketing
New technology continues to streamline personal finance
by Abi Moses on 25th April, 2017
Banks are noticeably using customer information to their advantage. The data they are gathering is helping to inspire investments in more-advanced technology in order to target prospective customers.
These changes are being gratefully received as the industry is known for not moving with the times or embracing technology enhancements. Although, changes are being put into motion because banks are feeling the pressure from brand new start-ups who are enabling customers to base their banking online.
Developments that are being made which will highlight banks when consumers are having particular financial issues. Customer service representatives have enabled banks to receive more data than ever before.
However, this amount of personal access by banks have been reported as dangerous in the era of ‘Internet is Everything’. Head of the Consumer Financial Protection Bureau, Richard Cordray, has stated that banks need to be careful. “We see the market moving quickly, with high stakes for all involved,” Mr. Cordray says. The new regulations are also being implemented in Europe.
One of the largest banking institutions in the US, Chase & Co. are already being careful with regards to these developments. For example, they are avoiding pitching a brand new credit card to an existing customer that’s been the victim of fraud. Hypothetically speaking, companies such as Chase & Co. know they are going to be making a lot of money in the near future therefore are mining it.
“The last thing we want to do is sell somebody a product they don’t want, or don’t qualify for,” says Kristin Lemkau, chief marketing officer at Chase. “We want to strengthen the relationship, not cheapen” it. Which means they are taking time to work out what their customers are comfortable with.
"If someone is buying a lot of things at the home-improvement store…maybe we should call them up and ask if they need a home-equity line, versus the old days, where everyone who walked into the branch, we would say, ‘Hey, do you need a home-equity line?’ says Bob Hedges, a partner at consulting firm A.T. Kearney.
Additionally, Fifth Third Bancorp are planning on experimenting with phone locations and technology. This will allow the company to communicate with customers via text message when they are in the area of a branch. The development is in order to encourage customers to stop by the branch and stick to using the traditional method of banking.
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