How Banks Can Leverage Transactional Data for Unparalleled Customer Engagement

How Banks Can Leverage Transactional Data for Unparalleled Customer Engagement

by May 31, 2024

In a recent Fintech Fireside Asia webinar titled “Monetising Transactional Data in Banking with Impactful Engagement,” fintech and banking experts gathered to discuss how banks can leverage their vast transactional data to drive customer engagement, increase customer lifetime value, and amplify business impact.

The panel featured Colin Dinn, Chief Transformation Officer of Vietcombank; Nauman Bashir, Head of Digital & Customer Value Management at Standard Chartered; Mukesh Pilania, Executive Vice President and Head of Digital Banking at Techcombank; and Dorel Blitz, Vice President of Strategy & Business Development of Personetics. The discussion was moderated by Urs Bolt, a fintech and banking veteran.

The Evolution of Data Usage in Banking

Colin Dinn kicked off the discussion by tracing the evolution of data usage in banking over the past few decades. He noted that before automation, banks had the richest data set due to personal interactions with customers. However, as automation increased, banks lost some of that intimate customer knowledge.

“What we’ve done through automation is we’ve lost a lot of that, and now we’re looking at how we gather that back,”

Colin said.

Colin Dinn, Chief Transformation Officer of Vietcombank

Colin Dinn, Chief Transformation Officer, Vietcombank

Banks have since gone through stages of viewing transactions as expenses, driving for convenience and adoption, collecting transactional data, and using data for credit decisioning.

Colin emphasised the importance of data privacy as banks move forward with utilising transactional data, stating,

“Data privacy is paramount. Data privacy is the overriding factor in any use of data, and that we’re going to be using going forward. And it’s a governance issue that every single bank takes very, very seriously.”

Trends in Financial Services Industry

Nauman Bashir shared insights on trends in Singapore, which he described as being “ahead in terms of many areas of how data is being effectively used.”

He highlighted regulatory sandboxes, digital banking licences, open banking, and APIs as key developments that have fostered innovation and improved customer experiences.

Nauman also noted the success of Trust Bank, a digital bank launched by Standard Chartered in partnership with a local e-commerce player, which has attracted nearly a million customers and built a strong balance sheet in just two years.

Mukesh Pilania, Executive Vice President and Head of Digital Banking at Techcombank

Mukesh Pilania, EVP and Head of Digital Banking, Techcombank

Mukesh Pilania discussed trends from an emerging economy perspective, noting the growing demand for ESG and green finance products. He also emphasised the importance of using digital solutions to enhance the capabilities of offline channels and create “super relationship managers.”

Mukesh said,

“There is of course real-time settlements, and then how we can connect holistically the entire end-to-end journey for a customer from the payments to say a wealth, and how can you deliver everything on digital.

 

And don’t keep digital only for end-users, but also use digital to enhance capabilities of your offline channels and branches and make your relationship manager super relationship managers by giving them technology solutions powered by data.”

Implementing Data-Driven Strategies

When it comes to implementing data-driven strategies, Dorel Blitz stressed the importance of starting with a well-defined business case and strategy.

“It’s never about the technology; the technology already solving most of the problems. It’s really about starting with defining the business case and the strategy to support it,”

Dorel said.

He also highlighted the importance of considering how banks want to deliver value to customers, and what the right channels are to increase customer usage.

Dorel Blitz, Vice President of Strategy & Business Development of Personetics

Dorel Blitz, VP of Strategy & Business Development, Personetics

Techcombank’s Mukesh Pilania agreed, adding that data quality and governance are crucial preconditions for successful implementation.

“Please imagine any tool is as good as the quality of data you have. If your data is not clean, data is not properly governed and structured, then many of these implementations will fail,”

he cautioned.

Mukesh suggested starting with a pilot, refining it based on results, and then implementing it while continuously refining the approach.

The Role of Branches in a Data-Driven World

The panellists also discussed the role of branches in a data-driven world. Nauman Bashir emphasised that branches will continue to play an important role, particularly for high-value transactions, advisory services, and relationship building.

“The value of human touch and personal interaction is extremely valuable, and it will remain valuable,”

he said.

Nauman noted that branches can serve as experience centres, where customers can provide feedback, attend financial literacy workshops, and exchange ideas.

Vietcombank Chief Transformation Officer Colin Dinn echoed this sentiment, stating that the branch is not going away anytime soon.

“We never should underestimate the value of a branch, because it is somewhere where we really do get that personal contact,”

he said.

Colin also challenged the notion of individual channels, arguing that banks should focus on creating a common sales and service architecture that integrates digital and data capabilities across all channels.

Collaborating with Fintechs and New Players

When asked about collaborating with fintechs and new players, Nauman Bashir acknowledged that while banks have not traditionally been known for being open to collaboration, this is changing rapidly.

Nauman Bashir, Head of Digital & Customer Value Management at Standard Chartered

Nauman Bashir, Head of Digital & Customer Value Management, Standard Chartered

“I think there’s so much value of collaborating, which by bank by themselves cannot do or that partner but themselves cannot do,”

he said.

“They cannot create that experience or service or product for customer unless they come together.”

Nauman cited examples such as Trust Bank and partnerships with buy now, pay later providers as successful collaborations that have created value for customers.

The Future of AI and Human Capital in Banking

The panellists also tackled questions about the impact of generative AI on legacy tech problems and the future of human capital costs in banking. While acknowledging the potential of AI, they cautioned against overhyping its capabilities.

“I think not in the near future. First of all, I think there’s a lot of excitement about generative AI, etc., and AI taking over the world, and hence the humans will not be required. I think that’s far, far away,”

Mukesh Pilania said.

He suggested that AI and technology will be used to enhance the capabilities of human bankers, creating “Ironman suits” that empower them with knowledge and data to better serve customers.

The Role of Transaction Data and AI in Future Banking

As banks continue to navigate the evolving landscape of data-driven customer engagement, it is clear that transactional data holds immense potential for driving business impact and improving customer experiences.

By focusing on data quality, governance, and strategic implementation, and by embracing collaboration with fintechs and new players, banks can unlock the power of this valuable asset to create more personalised, proactive, and impactful interactions with their customers.

While technology and AI will undoubtedly play an increasingly important role, the panellists agree that the human touch provided by bankers and branches will remain essential in building trust and deepening relationships with customers.

 

Watch the full “Monetising Transactional Data in Banking with Impactful Engagement” webinar on the Fintech Fireside Asia YouTube channel: