money makes a chain Feedback; The more you have, the more you can earn. But it can have an exponentially adverse effect if you don’t have it. This also applies to data. Large amounts of information improve the ability of banks to support customers, but financial institutions need to know how to use it.
Today’s banking customer is in dire need of banking guidance, whether it be spending, saving, borrowing, planning, or all of the above. These days, two out of three Americans struggle with their finances.
Also, their loyalty is easy to change as neobanks are more accessible with instant registration processes. Modern banks are faced with the task of getting to know their customers, delving deeper into the logic of their financial decisions and increasing their loyalty.
But without knowing what data to look for and how to understand the individual needs of your customers, a common approach and loosely classified consumer profiles ensure that customers are adequately supported financially and excluded from a similar financial situation, if not worse.
If a consumer wants to share his life with you, he must first understand the real benefits of this.
Let’s take a look at how modern banks can use data and build trust to improve the financial health of consumers.
The main pain points of modern banks
Banks should understand that the past financial history and characteristics of those classified as similar only represent: initial reflection in the hands of the customer.
Let’s say a girl is interested in a $1,000 coat. The algorithm told you that women of his age were buying it, and your system began forwarding the information to the BNPL. But what if the woman loses her job? What if she can’t make the BNPL payment?
BNPL can be a convenient way to make large purchases with attractive interest rates, but in case of emergency, you can resort to credit card payments. This will extend the duration of this BNPL loan and add additional interest to it. Even if he got a new job, he would put himself in even more financial trouble by denying the benefits of the BNPL.
It’s about the whole picture. OpenBanking provides fintech banks with information about their customers’ main accounts to tell you where they shop, how much they spend on certain products, whether they own a car, and information about their families. However, you will need to constantly adapt your operations to stay up to date with the latest data protection regulations.
Modern banks must enforce privacy and security regulations to keep their customer data safe. The Data Consumer Rights Act and the Gramm-Leach-Bliley Act (GLBA) require banks to use data strictly with an individual’s consent. They must ensure that consumers understand how their bank interacts with third parties using their personal information.
Here are three steps modern banks can take to solve data problems.