For smaller FIs where “digital transformation” may still mean establishing a #mobile app, some are far ahead of their peers. Bank Innovation previously reported on the mobile app user numbers of the country’s biggest #banks, and on average 44% of the top banks’ customers use their mobile app. On par with this metric is the […]
Bank Innovation
Payments platform #PayPal had $ 139 billion in total payment volume in 2Q18, up 29% YOY, and expects to add 30 #million net new actives by the end of the year, according to the company’s earnings call yesterday. Of that $ 139 billion, 39% of the total payment volume, or $ 54 billion, was mobile. Just $ 14.2 billion […]
Bank Innovation
Behind every great #technology is a human mind… well, obviously, right? That’s why FIs are always on the prowl for finding the most adept people that fit in with the institution’s #digital philosophy. Whether it’s a chief innovation officer spearheading major initiatives like creating an AI-powered bot or engineers orchestrating smaller changes to enhance the […]
Bank Innovation
Security firms have evolved their techniques to meet mounting #threats on a digital front, as such #banks #must #change too. At NICE Actimize, a cybersecurity and compliance firm established in 1999, Mary Ann Miller, senior director and fraud executive advisor, told Bank Innovation that within banks, departments have merged to better address threats. “Banks are […]
Bank Innovation
Financial difficulties and #mental #health are often linked, but they are usually treated separately. Silver Cloud Health has developed an online coaching program, Space from Money Worries, to help people gain confidence over money issues.
Financial Technology
Ant #Financial has done it #again. In 2Q18, the Chinese #fintech raised the largest amount for fintech invest ever. According to CB Insights’ 2Q fintech report, Ant Financial&8217;s #fundraising accounted for 69% of total #global fintech funding. This is not the first time Ant Financial has done something like this. Back in 2016, Ant Financial took […]
Bank Innovation
Over the past dozen years, numerous US regional #banks have relaunched consumer #credit card programs on a self-issued basis. At the outset, the growth component for many of these relaunch strategies relied heavily on branch channels, customer loyalty and the desire to consolidate banking relationships. In recent years, the banks’ credit card programs have been plateauing to low, single-digit growth rates without obvious incremental prospects for growth in accounts, spend and balances. Although credit card portfolio health and returns continue to be favorable, without the ability to demonstrate further stepwise growth potential, these programs are at risk of atrophy in key areas, such as attention from senior executives and ongoing investment in innovation.
Often, the keys to reinvigorating growth include identifying and addressing root-cause growth inhibitors (which often relate to approval rates, credit line assignment and service experiences), and finding ways to digitize and integrate customers’ credit card experiences with those of their overall banking relationships. #Data exhaust created by these card programs and other players in the payment value chain could hold a secret to vast amounts of information value to unlock growth opportunities.
Card issuers and, in particular, the payments industry generally have been early adopters of data-driven insights to grow their business; and rightly so, since the industry generates a massive volume of data. Banks are increasingly recognizing and reaching the point at which they need to drive innovative applications of the insights in functions that traditionally do not leverage them fully or consistently—for example, for enhancing customer experience or devising new product strategies.
In addition, as depicted in Figure 1, prospect and customer segmentation can be a key component of focusing growth strategy investments on areas of greatest opportunity. For instance, segmentation can help a bank determine areas for product refinement to both improve experiences for existing credit cardholders and tap into unserved or underserved markets. We also see segmentation as the prudent way for many banks to carefully venture outside of their existing retail banking customer bases through twinning analysis to identify characteristics their most profitable cardholder segments may share with non-relationship prospect pools.
Card issuers see only one dimension of customers. However, there is significant information asymmetry with other players in the value chain, namely, payment networks, merchant acquirers and merchants. Issuers capture data about #cards and cardholder details only, while merchant acquirers see details on merchants and transactions, merchants collect data on their customers and purchase basket, and the payment networks record data on movement of funds between these players and authorization tokens. Building a cross-payment cycle data view allows creation of rich micro-segments for hyper-personalization (Figure 2). It also enables banks to conduct merchant, store and product-level marketing studies, generate early warning indicators for fraud and delinquency, and create visibility into customer and industry trends.
Collection, cleaning and deciphering this data exhaust is an onerous task. However, advancements in artificial intelligence capabilities, like machine learning and Big Data, is making it easier and faster than ever before.
Capabilities, such as Accenture’s Intelligent Enterprise Platform that sits on top of the Accenture Insights Platform allows banks to layer third-party data from social media, web browsing and geo-tagging over the payments data. This further deepens card issuers’ understanding by manifolds around customer needs and behavior. It’s opening previously unimagined use cases, like real-time mood-/persona-based recommendations, geo-tagging and location-based offers to customers.
Looking forward, we anticipate that a cross-payment cycle data ecosystem together with machine learning will play a broader role in how banks generate new growth in accounts, spend and balances, as well as how they harvest value in their credit card programs.
We invite you to read about data as the new ecosystem currency in our report, The New, New Normal: Exponential Growth
Special thanks to Sanjay Ojha for his insights, as well as Rajat Mawkin and Uday Gupta, who also contributed to this blog.
The post The data imperative for credit cards appeared first on Accenture Banking Blog.
U.K. neobank #Starling is in a mood to switch things up, at least on the design front. Last week, Starling unveiled changes to the payments screen on its mobile app and today it unveiled a new #debit #card. For starters, the new debit card is not purple, Starling’s signature color. Instead it&8217;s teal and navy […]
Bank Innovation
Social media platform #SnapChat will shut down its P2P payment feature, Snapcash, as of August 30, after launching less than four years ago in 2014. Snapcash has faced a lot of competition from more popular P2P apps such as Venmo, Apple Pay, SquareCash, PayPal and even the #banks-backed Zelle, which reported a $ 25 billion in […]
Bank Innovation
With over 25 million #mobile #bank users on the retail side, Bank of #America is shifting attention to ramping the numbers on the #commercial side, with the launch of a mobile app for its #prepaid commercial cards. Today, Bank of America #Merrill #Lynch unveiled an app specifically designed for reloadable commercial prepaid cards. These cards […]
Bank Innovation
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