The level of disillusionment more consumers are experiencing with regards to the technological adeptness of their chosen financial institutions has grown in recent years. The dissonance in experience between their day-to-day online shopping experiences in comparison to the quality of the interactive experience with their bank is widening. The author of the article puts it well.
Bank customers can be forgiven for wondering how Facebook and Google can seamlessly anticipate and fulfill their requirements, while their bank of 30 years cannot do the same. After all, banks have far richer data about us than any social media site, yet they have not been able to use that information to efficiently predict our future financial needs.
It may well be that the level of threat or of customers leaving or not engaging has previously not been sufficient to inspire FIs and their service providers to make the necessary investments to serve consumers and small business more individually based on historical personal information. However, whatever the reservations from action were, those reasons are more clearly being outweighed and are inspiring FIs to take action.
The challenge for financial service providers, like all industries with legacy technology, is finding ways to dovetail their valuable data together with modern systems and networks. Legacy client applications and task-specific data warehouses mean that, unlike the social media industry, banks don’t naturally have all of their client and transaction data available for analysis, the way that the newer social media companies do.
Mercator Advisory Group anticipates more financial institutions will be undertaking fundamental shifts in how they manage their own data pools to increase interoperability and while retaining security and privacy. The leverage of APIs will be a central component is this transition. Please see our recently published research Banking as a Platform: API Technology Presents Opportunity to Financial Institutions for additional insights.
Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group
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