By John Ginovsky

Get ready for a whole new shift in marketing from simply reacting to a customer’s likely need or want, to anticipating that need or want even before the customer is aware of it.

It’s sometimes called “predictive analytics,” and sometimes called “context-based services.” Either way, the idea is for businesses, including banks, to absorb all the data they know about individual customers from all data streams and then, almost instantly, make an offer or suggestion that may be of benefit.

“Where we’re going is better and better predictive analytics, understanding how consumer sentiment as expressed in social media can help drive models that predict customer attrition, or an opportunity for customer accumulation,” says Curt Johnson, director, product management, Open Solutions, to Tech Topics.

As a simple example, he says, suppose the bank down the street suddenly imposes an unpopular fee program. The online social networks light up with discontented customer comments. Seeing that, other banks have an opportunity to capitalize on it, deriving part of their conclusion purely out of customer sentiment expressed in social media.

Accenture, in its annual technology forecast, calls it “context-based services,” and predicts that an associated surge “is imminent, enabled by the convergence of and easy access to many sources of contextual information, including soaring smartphone usage, the expansion of cloud computing, an explosion of social media participation, and the development of powerful tools for aggregating and analyzing multiple forms of data.”

Accenture’s Jim Bailey, managing director/payment services in North America, tells Tech Topics: “There’s far more information [now] that can be gathered about that customer. Preferences. Interactions. Social media. Couple that with analytics, you have a very powerful proposition that allows for much greater customer intimacy with banks and also across the payment process, and ultimately into retailers and other sectors. It’s really the confluence of many trends.”

Adds Nigel Smith, Accenture managing director/banking distribution and marketing services in North America, “It’s taking it to another level, [to] the understanding that we know what device you use. We know where you are. We can also adapt the proposition that we can give you based on the context.”

For example, he says: “What you want when you’re at home in the evening browsing on the web on your PC doing some product research is going to be very different from if you are interacting with the bank and you’re on the [subway] at different times of the day.”

Still, Smith says, it’s not here yet. “Ultimately, what share of investment dollars this will get this fiscal year, it’s probably not a huge amount. It’s going to be more about experimentation in the main; figuring out how to drive value.”

There are signs that the third parties are paying attention to this. A company called Beyond the Arc teamed up with Attensity to take a stab at predictive analytics aimed specifically at banks. Beyond the Arc collects millions of social media posts from a variety of platforms, applies a proprietary data mining algorithm, and delivers a social data set targeted at financial services. Attensity applies proprietary filters to exclude irrelevant noise in the data and present the results in a digestible summary.

Beyond the Arc also partnered with Clarabridge, which specializes in identifying fraud, analyzing risk, and suggesting improvements in customer experience, all based on data gleaned from social media, public commentaries, and regulatory filings.

 

 

About the Author John Ginovsky is contributing editor of ABA Banking Journal and editor of the publication’s TechTopics e-newsletter. For more than two decades he has written about the commercial banking industry. In particular, he’s specialized in the technological side of banking and how it relates to the actual business of banking. He previously was senior editor for Community Banker magazine (which merged with ABA Banking Journal) and was a staff writer for ABA’s Bankers News.

[This article was posted on February 22, 2012, on the website of ABA Banking Journal, www.ababj.com.]

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