How the Finance Sector Can Maximise Retention and Increase ROI

There have been huge levels of transformation in almost all industries when it comes to serving and monetising customers, yet UK banks and other financial services organisations have hardly changed their business models at all in the past decade. Unsurprisingly, the industry is now facing a growth challenge.

UK banks offer a comprehensive range of products and are sitting on a goldmine of customer data, but they have done very little to improve cross-selling or how they relate to their customers – and their customers are savvier than ever before and have higher expectations of their banking experience.

Thanks to the growth of platforms like Netflix, Spotify and Instagram, customers expect businesses to know them well and deliver personalised products and services. At the same time, new players including Shopify and Klarna present financial solutions to the customer exactly when they need them, so they feel they no longer need to research the right financial product. Today’s banks have a way to go to meet these expectations.

A challenging environment

Banks are, of course, not operating in the same environment as companies in other industries. There is, quite rightly, a heavy weight of regulatory control for banks to shoulder and the FSA (financial services authority) has the potential to heavily fine financial services organisations for misinformation. There is a delicate balancing act they need to perform – ensuring they leverage their data in a way that makes sense while abiding by the strict regulatory frameworks in place.

A unique opportunity

The finance sector is one of the few industries where consumers can become a customer for life. By taking a holistic approach to how customers are engaged in financial services organisations, you can tailor customer journeys to maximise retention and considerably increase ROI.

 So how can financial services organisations exert influence over customer acquisition and retention, while ensuring they stay compliant? How can they be useful partners to their customers through their use of data, while ensuring they continue to be viewed as effective custodians of data?

One way is to look at the way data is leveraged, while maintaining the very highest standards of data protection.

Data protection is something all financial services organisations take very seriously, with good reason. Many data protection and privacy regulations require organisations to respect people’s requests around how their data is used. This is a multi-layered process that involves respecting their wishes when they request only specific forms of contact or opt-out of certain types of data sharing.

Overcoming the data protection hurdle: Ensuring Secure and Consent-driven Data Practices

In the finance sector, the security of customer data is paramount. Financial services organisations handle sensitive information, and safeguarding this data is not only a legal requirement but also an ethical obligation. These organisations must ensure that customer data is kept safe, secure, and used only with explicit consent.

One of the significant challenges that some finance organisations face is the presence of legacy technology systems. Dealing with outdated systems can make it difficult to implement robust data protection measures and streamline consent management. For instance, when it comes to website content, these organisations may work with multiple service providers, each handling different aspects of the website. This fragmentation can complicate consent management efforts, leading to potential data compliance issues.

To address these challenges and achieve a comprehensive data protection strategy, finance organisations must strive for coherent and straightforward consent management across all entities. This approach not only enhances data security but also unlocks new marketing opportunities. By obtaining explicit and informed consent from customers, finance companies can build trust and foster transparent relationships, thereby strengthening their brand reputation.

Aggregation to beat silos

A good way of bringing data together without violating data privacy is through aggregation. Aggregating the data they hold, by building bigger groups or by ensuring they do not use detailed individual data by creating a bigger interest group, can unlock some powerful opportunities.

Implementing User-Friendly Consent Management Solutions:

To streamline consent management and enhance data protection, finance organisations can turn to user-friendly Consent Management Provider (CMP) solutions. These CMPs are designed to work seamlessly across all of an organisation’s domains, simplifying the process of obtaining and managing customer consent. Through these solutions, customers can be presented with clear and accessible consent options, ensuring they are fully informed about how their data will be used.

Furthermore, consent handling can be efficiently coded into Tag integration. Tags are snippets of code that collect and send data to various analytics and marketing tools. By integrating consent management into tags, finance organisations can ensure that data collection and processing activities are aligned with customer preferences and consent choices.

Implementing Tag Management Solutions for Flexibility:

Tag management solutions play a crucial role in data management and data protection. These solutions allow finance organisations to implement tags across all their applications, ensuring consistency and efficiency in data collection and marketing activation. A smart Tag manager offers the added advantage of providing more flexible fixes and adjustments, independent of IT and release cycles. This agility enables organisations to respond promptly to changes in data protection regulations and customer consent preferences.

If banks do not have a tag manager yet, they definitely need one. Even more importantly, they should make sure that they have the inhouse resources to control it. Ideally, this responsibility will sit as part of a marketing or optimisation team, rather than within an IT department (where approval processes are usually long and inflexible).

Balancing Data Protection and Marketing Activation:

Gaining customer consent unlocks marketing activation possibilities while maintaining a focus on data protection and risk management. With explicit consent, finance companies can leverage first-party data to create personalised marketing campaigns that resonate with individual customers. By understanding customer preferences and behaviour through consented data, finance organisations can deliver targeted offers, relevant content, and personalised experiences.

However, it is essential to strike a balance between utilising customer data for marketing purposes and safeguarding sensitive information. Finance organisations must prioritise data protection measures and implement robust risk management practices to prevent data breaches and potential security vulnerabilities. Complying with data protection regulations such as GDPR, CCPA, or any other relevant laws ensures that customer trust remains intact.

In conclusion, overcoming the data protection hurdle is critical for finance organisations seeking to maximise retention and increase ROI through first-party data. By embracing user-friendly consent management solutions, implementing tag management systems, and maintaining a customer-centric approach to data protection, finance companies can build trust, enhance customer experiences, and drive revenue growth in a secure and compliant manner. Through this thoughtful and strategic approach, the finance sector can pave the way for sustainable and customer-centric success in the digital age.

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• Source: https://www.finextra.com/blogposting/25026/how-the-finance-sector-can-maximise-retention-and-increase-roi?utm_medium=rssfinextra&utm_source=finextrablogs