Banking and insurance companies are finding it increasingly difficult to classify customers by lifestyle or needs. Each person demands a completely personalized experience.
Additionally, more than 77% want to receive unique offers based on their purchasing patterns, according to Adyen’s 2023 retail trends report. And this is information that companies have at their fingertips!
Óscar Barba
Co-founder & CTO of Coinscrap Finance
First of all,
What exactly are financial insights?
Financial insights are like gold nuggets hidden in your banking transactions. They are valuable information about how you spend and save money, which your bank can use to help you make smarter financial decisions, such as budgeting and saving efficiently. It’s like having a treasure map for managing your money.
Capturing the full potential of data: an untapped opportunity for financial insights
Today, financial institutions are focused on creating exceptional experiences for their customers. The rise of digital banks, payment platforms and fintech have given rise to an exciting and competitive landscape where innovation emerges from all corners. The key for traditional banking and insurance companies is to maintain a customer-centric approach, reduce service costs, embrace agility through rapid digital transformation and improve user experience.
I know it doesn’t seem easy at all! But, as I told you, you have an ace up your sleeve: the collection, analysis and enrichment of transactional information. This not only improves your products and processes, but also increases retention and conversion rates, among other benefits.
Let’s get to the point:
How can you detect useful financial insights and make data-driven decisions for your business strategy?
First, you need tools that transform the enormous amount of data generated in your customers’ daily transactions into understandable information.
Artificial Intelligence transforms online banking: data-driven decision making
Artificial intelligence and natural language processing allow you to decipher each of the expenses and income that are reflected in your users’ online banking so that you can see what really interests you: if it is a duplicate charge, an unusual movement , the payment of a tax, a transaction abroad or an expense considered a “risky habit” by the bank, such as a sports bet.
Many banks are making significant progress in this field. In fact, according to Forrester research, retail banks that strive to implement customer-centric strategies while advancing their digital transformation experience growth 3.2 times faster than their competitors.
Furthermore, as experts in AI, at Coinscrap Finance we categorize transactional data with 91.3% efficiency. All this thanks to our own artificial intelligence engine, COCO, developed in collaboration with the University of Vigo.
Here is an article where I explain how artificial intelligence is changing the financial sector.
A true revolution in customer experience through financial insights
Customers agree that a company is only as good as its service, and being heard and understood is the most important factor in any interaction. Hyper-personalization is the next step. We have verified that companies that invest in personalized experiences are seeing their return on investment increase. Today’s users are more willing to buy, recommend and commit to companies that offer these types of experiences. Especially in the case of the younger generations.
Rejuvenating the average age of financial institution clients is becoming a real challenge. In recent times we have been witnessing a fight to get new users to take their payroll to another entity, offering juicy amounts of money in exchange. For banks it represents a considerable extra effort, especially taking into account the rise in interest rates and the reduction in business margins.
Real connection with users: the goal of all innovation in data-driven decisions
Despite these promising trends, there is still room for improvement. A significant percentage of financial services leaders believe their companies can do more in terms of personalization. To close this gap, their strategic approaches are focusing on using technology to understand and satisfy their customers’ requests. An interesting option is to offer personal finance management tools. They are very attractive to consumers and help them in their daily lives with alerts, advice and programmable actions.
Indeed the secret is to make the domestic economy easier! Something impossible without the capture and maximum exploitation of financial data. They are essential for the success of the industry and, in the form of insights, they allow companies to offer unique experiences. As they are based on information available in real time –both for end customers and for entities– they represent a competitive advantage for those who master them. It’s simple, if you have the right tools.
About the Autor
Óscar Barba is co-founder and CTO of Coinscrap Finance. He is an expert Scrum Manager with more than 6 years of experience in the collection and semantic analysis of data in the financial sector, classification of bank transactions, deep learning applied to stock market sentiment analysis systems and the measurement of the carbon footprint associated with transactional data.
With extensive experience in the banking and insurance sector, Óscar is finishing his PhD in Information Technology right now. He is an Engineer and Master in Computer Engineering from the University of Vigo and Master in Electronic Commerce from the University of Salamanca. In addition, Scrum Manager and Project Management Certificate from the CNTG, SOA Architecture and Web Services Certificate from the University of Salamanca. He recently obtained the ITIL Fundamentals certification, a recognition of good practices in IT service management.
