In its latest blueprint, the firm explains how integrating
third-party data can reshape retail banking, offering financial
institutions a strategic edge in understanding customer behaviors
and preferences. Info-Tech's research outlines how banks can unlock
valuable insights, personalize offerings, and drive growth in an
increasingly data-centric industry by leveraging external
datasets.
TORONTO, May 16, 2024
/PRNewswire/ - With the financial industry becoming increasingly
data-centric, retail banks are actively seeking innovative ways to
enrich customer profiles and elevate their service offerings. The
integration of third-party data in retail banking marks a
significant shift toward highly personalized customer service,
revolutionizing operational efficiencies. However, leveraging
valuable third-party data comes with its own set of hurdles,
including stringent privacy regulations, concerns over data
accuracy, and the technical complexities involved in integrating
disparate data sources. Info-Tech Research Group's latest
research, Third-Party Data in Retail Banking, examines
the crucial role of third-party data in redefining retail banking
experiences. The blueprint not only addresses the critical demand
for advanced data strategies but also provides banking IT leaders
with essential guidance on effectively using external data sets to
secure a competitive edge in the exponentially evolving digital
finance sector.
"As banks continue their journey to offer their customers
innovative and convenient products and services designed to meet
their unique needs, they require a deeper understanding of not only
their financial transactions within the bank but, increasingly,
their non-financial lives outside of the bank," says
David Tomljenovic, principal
research director at Info-Tech Research Group. "Many customers
are voluntarily offering their bank more information about their
non-financial lives because they have recognized the benefits that
come from sharing aspects of their non-financial lives in exchange
for better and more relevant products and services."
According to Info-Tech's research, banks hold vast amounts of
customer data but often fail to extract meaningful insights about
their clients. To bridge this gap, banks are increasingly turning
to non-financial third-party data to gain a comprehensive
understanding of their customers' needs. However, many banks
struggle to organize and derive value from third-party data as it
is challenging to integrate and align it with their first-party
data. In such situations, customer data platforms (CDPs) play a
crucial role by helping connect the first-party data to third-party
data, thus creating a 360-degree unified customer view. Despite the
numerous new challenges involved, mastering third-party data is
becoming indispensable for banks aiming to enhance customer
retention and competitive positioning in today's competitive
market.
"Third-party data helps banks to better understand their
existing customers' lives and to build profiles of new customers
that the bank can target with new products and services with
specific, relevant, and personalized offers," explains
Tomljenovic. "Success with third-party data is becoming
essential for continued growth and relevance to retail
banks."
The blueprint further explains that third-party data plays a
crucial role in supplementing zero- and first-party data, creating
immense value when combined. Zero- and first-party data, while
detailed and accurate, cover only interactions within the bank,
thus limiting their scope. Third-party data, in contrast, extends
these insights by providing broader contextual information about
customers' activities outside the bank, although it may lack the
same level of detail and personalization. By integrating these
different data types, retail banking IT leaders can obtain a more
comprehensive and precise view of their customers beyond just their
financial affairs. This enriched perspective can help retail banks
make informed decisions and provide superior customer service.
In the Third-Party Data in Retail Banking blueprint,
Info-Tech details the various data tiers within banks and their
specific contents. Insights gained from this data help IT leaders
in the banking industry enhance operational efficiency, foster
innovation, and elevate customer experiences in an increasingly
competitive financial landscape.
Zero-party data is explicitly shared by the consumer and
includes their preferences, attitudes, and interests through direct
interactions such as surveys, preference centers, polls, and
questionnaires.
First-party data refers to the detailed information
about prospects and customers collected, owned, and managed by the
banks. This data can be gathered by observing customer spending
behaviors or from first-party cookies on the bank's website.
Second-party data, or partner data, consists of
information obtained through strategic partnerships with other
firms. Examples of second-party data can include co-registration
campaigns, such as contests or sweepstakes, and co-op data pools
created by a collaboration between a group of companies.
Third-party data is collected from external data
providers without any direct connection to the consumers whose data
is collected. Financial brands leverage third-party data to gain
deep insights into customer behaviors and preferences, enabling the
creation of personalized marketing campaigns.
With ongoing advancements in AI and machine learning tools,
banks are well equipped to enhance their capability for real-time
ingestion of vast amounts of internal and external data. This
technological evolution will empower banks to offer nearly
instantaneous product and service personalization, adapting to
changing market needs and conditions at any given moment. Such
capabilities are set to significantly elevate customer satisfaction
and drive business growth, positioning banks at the cutting edge of
the digital economy.
For exclusive and timely commentary from David Tomljenovic, an expert in the financial
services industry, and access to the complete Third-Party Data
in Retail Banking blueprint, please contact
pr@infotech.com.
Info-Tech LIVE 2024
Registration is now open for Info-Tech Research Group's annual
IT conference, Info-Tech LIVE 2024, taking place September 17 to 19, 2024, at the iconic Bellagio
in Las Vegas. This premier event
offers journalists, podcasters, and media influencers access to
exclusive content, the latest IT research and trends, and the
opportunity to interview industry experts, analysts, and speakers.
To apply for media passes to attend the event or gain access to
research and expert insights on trending topics, please contact
pr@infotech.com.
About Info-Tech Research
Group
Info-Tech Research Group is one of the world's leading
research and advisory firms, proudly serving over 30,000 IT and HR
professionals. The company produces unbiased, highly relevant
research and provides advisory services to help leaders make
strategic, timely, and well-informed decisions. For nearly 30
years, Info-Tech has partnered closely with teams to provide them
with everything they need, from actionable tools to analyst
guidance, ensuring they deliver measurable results for their
organizations.
To learn more about Info-Tech's divisions, visit McLean &
Company for HR research and advisory
services and SoftwareReviews for software buying
insights.
Media professionals can register for unrestricted access to
research across IT, HR, and software and hundreds of industry
analysts through the firm's Media Insiders program. To gain access,
contact pr@infotech.com.
For information about Info-Tech Research Group or to access the
latest research, visit infotech.com and connect via
LinkedIn and X.
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SOURCE Info-Tech Research Group