Kære læser. Artiklen her er en del af det engelske magasin Copenhagen Fintech. Indholdet er udformet på engelsk, da det også henvender sig til en udenlandsk læserskare, som deltager på eventen Money2020, hvor Berlingske Media er mediapartner. Magasinet er udformet af Berlingske Medias kommercielle redaktion i samarbejde med Copenhagen Fintech. God læselyst.
Sponsored by Adobe
Don’t look at regulation as a barrier. It can actually help you focus and leverage existing data according to Adobe.
“It is necessary to address your customers in a personal and relevant way in order to stand out,” says Michael Plimsoll, Industry Marketing Director at Adobe.
Given his current work at Adobe, where he advises clients of adopting a data-driven marketing strategy, and his previous work with data analytics, he knows the value customer data can bring in different scenarios.
Content + data-driven insights
“Bring together all the information you know about the customer whether it is CRM-data, behavioural data or social data so you can use clever algorithms with AI and machine learning to predict what the next best action or message should be,” says the experienced digital marketer with a passion for data analytics. He adds that when the needs of the customer are identified, including context, location, device and other temporal and behavioural variables, then you can send out a message tailored to the needs of that specific customer.
“Without great content, you can't break through to the customers. Without data-driven insights you can't target, you can't measure or get the results you need. Content and data working together creates the great experience they need.”
AI and machine learning – when?
All this about AI and machine learning sounds fantastic, but how far is the financial sector in applying these technologies? Well, the potential of the technologies is acknowledged, but the actual, widespread implementation is still a few years off. According to a report titled “2017 Trends in Financial Services and Insurance: Customer is Priority,” only 4 percent of financial service companies see “using artificial intelligence/bots to drive campaigns and experiences” as the most exciting opportunity for 2017. However, a full 33 percent see it as the most exciting opportunity for 2020. Fintechs, like Moneyfarm, are already leveraging this new capability to great effect and it will not be long before the traditional mainstream players follow suit.
Management of data is crucial
This doesn't mean, however, that personalised experiences are off the table. According to the report, which was written by Econsultancy in association with Adobe, the top priority in 2017 for financial companies is targeting and personalisation. As Plimsoll points out, 2017 is all about building a foundation of data that complies with regulations and meets customer experience demands.
“We have to identify where the data is, bring it together and put it into the right format so we can anticipate, predict and deliver what the customers want almost before they ask for it. We need to do all these things whilst considering and respecting their privacy,” he explains.
»Without great content, you can't break through to the customers.«
And what about regulation?
Regulations, such as the EU General Data Protection Regulations (GDPR) which will come into effect in May, 2018, are aimed at protecting individuals' privacy and can be perceived as inhibition on innovation – though they don’t necessarily have to be. GDPR is stressing the importance of data management, which will accelerate the work of identifying data and make sure it is available to the right people at the right time, thereby enhancing the establishment of a data infrastructure necessary for data-driven insights. Similarly, with the Payment Service Directive 2 (PSD2) to be implemented by January, 2018, financial institutions can feel almost besieged by regulatory frameworks. Plimsoll acknowledges the compliance burden, but believes that this regulation can also be used in innovative ways.
“The financial service industry is under massive pressure and subjects such as privacy and security make it a highly regulated industry. The regulation, however, is helping to drive change. PSD2 with open API's will drive more competition, but also make banks leverage their data better. In many ways, it will speed up progress,” Plimsoll predicts.
Incumbents, startups and innovation
Plimsoll mentions financial institutions such as RBS and Aviva which have digital startup labs in order to set innovation free so they are not constrained by traditional barriers.
“We will see more rapid innovation and leverage of data with PSD2 as well as more fintech partnerships aimed at more and better use of data,” he says.
Establishing small, agile labs more or less shielded from the mother company is one thing, turning the mother organisation itself around is quite another. Many financial institutions with legacy systems and technology stacks face challenges, which is reflected in the fact that only 64 percent of financial organisations claim to have “access and control over customer and marketing application data” – significantly lower than the average of 75 percent across other sectors.
Better usage of data
Financial organisations are well aware that improved data analytics will be a crucial component of better customer experience, but they also admit that their capabilities lag behind their ambitions. A full 99 percent of respondents consider “improving data analysis capabilities” to be a key element in better understanding customer experience requirements, and more than half of respondents plan to increase their marketing analytics budget over the next year.
Financial organisations are already data rich and have smart, data savvy people who have put the data to good use in instances such as fraud detection. We will see the same happen in data-driven marketing and engagement with existing customers.
“How do we get the right quote? How do we predict what the right account is? We must look at the individual customers and make the right product or service available to them. Forget about the product, and focus on the customer. Once you’ve got a sufficient data infrastructure in place, you can begin to focus on delivering data-driven customer experience that will differentiate you from your competitors,” Plimsoll concludes.
This article is part of the commercial publication 'Copenhagen Fintech'. Click here to view all articles