In today's ultra competitive environment, it's never been more important for banks to form durable relationships with their customers. The cost of acquiring customers far outweighs retention costs, but with customers more informed than ever, it's not a given to expect them to stay loyal to you just because of the rigmarole that comes with changing banks.
In the UK more than 600,000 people switched their current account in the UK this year, an increase of 14% from 2013. This increase has put a lot of pressure on banks to forge sustainable relationships with their customers and to create a seamless banking experience that anticipates customer expectation in advance.
Unfortunately for banks, the nature of what they do is never going to inspire trust, but analytics can help banks to offer that personal touch that customers demand from other services which have moved online. Unsolicited marketing interactions are not tolerated by consumers anymore, so it's essential that banks target adverts that are tailored to a customer's specific needs, especially in terms of price, timing and channel match. This can be done through cross-channel analytical tools that help to appropriate these metrics.
As an extension of customer interaction, attrition and loyalty can also be measured using analytics. This is of particular importance because measuring attrition levels can help to identify when and why your customers are switching. This can allow retail banks to target specific adverts at consumers who are contemplating the dreaded switch.
Cost analysis and transactional behavioural analysis can also be measured. Overall, analytics is going to help revolutionise banking so that it becomes a far more personal service. If a bank decides to fight on without it, they could find themselves blanketing customers and losing clients to other providers.