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This time, a look at managing your customer data: past, present and future.
Hello and welcome to March! I trust the year has gotten off to a good start for you. In this issue, I want to address a fundamental matter that will impact many of your current and future technology projects - the quality of your customer data.
The concept of leveraging your data is not a new one. I've often spoken about the "gold mine" of customer information that exists in your files. It is increasingly important to put a strategic focus on data analytics.
Before your efforts can be successful, you must be confident that your data is in good shape. Clean, accurate data files allow you to be confident that you are able to use your data for improving internal productivity, enhancing customer service, and creating effective marketing campaigns.
Over the years your bank has been in existence, numerous factors have combined to degrade data quality. Manual processes, manual conversions, automated conversions, and yes, poor and inconsistent practices.
I know that you may feel this is an overwhelming task. Effectively tackling this project will pay dividends in many ways, for years to come. Thus, it is a worthwhile effort.
So let's get started. The first step is to draft and enact a data strategy that will guide you in controlling the quality of data that flows into your system. While this is not a comprehensive list, here are some key concepts that should be addressed:
- Customer input - Which systems allow direct customer input? On line applications and account opening? Mobile and Internet apps that allow customers to enter or update data (phone, email, etc.) How is this information evaluated and managed before it reaches your core?
- Employee input - Create guidelines (and provide training) on entering data for both existing and new customers. These guidelines are critical to addressing how to style accounts involving complicated personal names, or consistently styling business accounts so there is a predictable structure to how you treat industries, religious organizations, or other non-profits.
- Third party systems input - perhaps you've been frustrated that your core provider has rigid standards for allowing third party or "fintech" solutions to read and write data from your core. In reality, this is protection you should expect. Your core provider is tasked with accurately posting transactions, securing your data, and providing reporting across many channels. You want them to carefully control access from other providers so that your bank's data standards are kept high.
In all of these cases, there are likely software configuration capabilities that will allow you to codify and thus control how data is entered and quality checked. Leveraging your technology to enforce policies and procedures is a win. Make sure you are using these features.
While the above will assist in you in improving the quality of data that is input to your system, there remains the matter of cleaning up what you have right now.
In my experience, the most common problem is that you have multiple records for the same customer. This can result in a fragmented or distorted view of the customer's relationship, and makes you likely to make mistakes about serving that customer. Using your basic reporting capabilities, try to identify instances where you have such duplication. Break it out by branch, and ensure that employees who are knowledgeable about your customers take their time to review reports and make corrections. You may have this issue with business customers as well as consumers. Remember that the findings from these corrective efforts may be useful in fine tuning your policies and procedures to prevent repeat performances of errors that got you here in the first place.
Once these semi-manual processes have been undertaken, it is time to look for additional automation help. I already mentioned software configuration that can be used to control the data entry process. Beyond that, it is likely that your core vendor has software designed to help you identify additional data errors that are more complex than simple naming conventions. Going forward, this is an area where we expect AI and Machine Learning to have impact, by searching more thoroughly and accurately correcting data in much less time than humans could accomplish it. Still, testing and auditing results is a best practice, no matter how much you trust the technology.
Another best practice is to use points of customer contact to ensure that your information remains accurate. Notice if you call your local utility company, they will often ask to verify your phone number or email address. While is is to some extent used to validate your identity, it is also an excellent way to keep contact information updated. Questions like "is this still the best phone number to reach you on" or "are you still using this email address" are simple enough and help in keeping information up to date.
The focus here is simple: initiate and perpetuate efforts to maintain an accurate database of your customer information in order to improve service to your customers, and enhance your efforts to do more business with them. As always, let me know if I can help with these or other matters.
It has already been a busy year for speaking commitments, with programs in Iowa, Kansas, and Georgia during February. April will see me at the Missouri Banker's Credit Conference and at the GSB IT Management Program in Wisconsin. May will feature a trip to Minnesota for the MBA's Technology Conference.
Trent Fleming
trent@trentfleming.com
901.896.4007
If you are new to my newsletter, you should know that I serve as a trusted advisor to financial institutions. My goal is to help community banks make good decisions on matters of strategy, management, and technology. My practice includes core vendor evaluation and negotiations, and moderating strategic planning sessions.
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