Turning data into marketing intelligence for a better borrower experience


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Credit unions and community banks are entering a more competitive market, especially with consumer loans and auto loans. Fortunately, lenders have learned that they can carve out a competitive advantage by providing a better borrower experience.

Inflation drives up the price of cars, making it harder for dealers to remove vehicles from their lots. Any friction in their process can be enough to put buyers off.

On the consumer lending side, as data from TransUnion suggests that demand for these loans is growing, more and more competitors continue to enter the space. McKinsey has been encouraging companies to enter the space for a year, and research from PriceWaterhouseCooper shows that “disruptors continue to make inroads, especially among millennials.”

Meanwhile, borrower expectations are extremely high. We can cite big tech companies for a lot of that. The so-called “Amazon Effect” has changed everything for consumers, from shopping habits to service expectations. It is our responsibility to meet these expectations. For that, we need data.

Lenders have access to data to provide this kind of experience. Unfortunately, most lenders have yet to establish the link between their data warehouse, their business intelligence (BI) software and their marketing automation platform (MAP).

By integrating business intelligence with marketing automation, lenders will have a clearer picture and understanding of their borrowers and be able to tailor experiences to meet the needs of those they serve. Plus, it will force them to think differently about how they use their data.

Capitalize on a lot of digital information

Data is quite possibly the most valuable currency in business today. This is good news for financial institutions as they are inundated with data. Each product or service delivered to a consumer comes with its own payload of consumer information that the lender can use.

In the past, this data was trapped in paper files and inaccessible to management. High-level reports were tedious and rarely offered more than simple indicators for monitoring institutional performance. Even so, management used the available information to make decisions that served to guide the business.

Today we have the opposite problem. Management floats in data on its borrowers, but often lacks the analytical power to turn data into vital information.

This is changing, of course. With powerful BI tools, institutions can glean more actionable insights from their data and make more informed decisions. Typically, we see lenders using this information to benchmark performance across branches or by product type, allowing them to make changes that will keep them competitive.

Unfortunately, lenders have a lot of data that they never touch and that never enters their data repository. This unstructured data is virtually invisible and unusable until it enters the data warehouse.

Strategic uses of data are good for financial institutions, but going down to the lending or consumer level, they can make tactical decisions that can win them more business in the short term. The key that opens the door to this opportunity lies in connecting the BI platform to a marketing automation platform.

The smartest place to leverage business insights

It makes sense to use data to make better strategic decisions, but it can be even more useful as a tactical tool. Acting on data intelligently is what drives relevance for the borrower. Tailoring offers to a particular borrower based on our available data provides a significant competitive advantage in the marketplace.

Consumers want a personalized experience. In fact, current data from Forbes suggests that 71% of consumers will feel frustrated when a shopping experience is impersonal. According to ClickZ, some companies pay third parties to provide personalization reports to their customers and report a 20:1 return on investment.

Our data shows that 90% of financial institution leaders know that BI is important to their institution. However, only 40% of lending institutions actually use some form of BI on their data, allowing them to create new dynamic reports that provide clear insight into what is really going on.

We don’t see more executives leveraging BI because many community banks and credit unions that have invested in new BI initiatives in recent years are still struggling to get satisfactory returns on those investments. We would say that they are not using this information as effectively as they could be.

Lenders should also leverage this information to personalize the experiences of their borrowers. Personalization lets borrowers know that their financial partner understands them and their needs. In the past, this was not easy to achieve, especially for lenders where transactions are often separated by years. It’s much easier today. Lenders have enough information about the consumers they serve to create personalization reports.

A new vision of market intelligence

Every marketing department seeks market insights, especially when the competition intensifies. Most will use this information to make strategic decisions.

The information they seek is already internal. By creating and maintaining strong data repositories, then using BI software to feed data into their MAP, they will have a new vision for their business. Not only will it provide insights that will drive better strategic decisions and outcomes, but it will also provide insight into product usage, by consumer, at scale.

The result, from the borrower’s perspective, is an institution that really knows them and understands their needs. It’s just about connecting the technologies that lenders are already using – BI and marketing automation – for a better experience.

Credit unions that make the link are seeing an increase in NPS and member satisfaction. This will allow them to drive loan growth, deposit growth and even non-interest income, for example by cross-selling insurance products, giving them the power to grow in a highly competitive market.

ken burns

Ken Burns EVP, Sales Origence Irvine, CA.

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