Unlocking Customer-Centric Banking: Challenges, Solutions, and the Importance of a Blueprint for a Unified Platform

Banks and credit unions need a 360-degree view of their customers and members to deliver the elevated experiences that customers expect. Consumers want seamless experiences that cater to their needs and preferences. Fintechs, megabanks, and neobanks need to meet these expectations in order to win the business of customers.

These market pressures make understanding each customer holistically more important than ever. However, achieving this view can be challenging, especially considering the limitations of banking legacy infrastructure. This blog post will explore the power and challenges of unified platforms as well as the drawbacks of fragmentation.

The Importance of a Unified View of the Customer in Banking

A 360-degree view of the customer in banking provides insight into opportunities for growth as well as risk mitigation. In pursuit of improving satisfaction and loyalty, financial institutions are looking for ways to enhance customer experiences and provide differentiated offerings. Moreover, a holistic view of their customers can improve cross-selling and upselling, further increasing revenue. Financial institutions that get it right will also enjoy expanding revenue streams and increasing profitability throughout the lifetime of each customer relationship.

A full understanding of each customer’s behavior and expectations also provides an accurate assessment of a customer’s risk profile. Such an understanding greatly mitigates risk by improving lending decisions and management as well as preventing fraudulent activities. It also ensures compliance with various regulations, such as know your customer (KYC) and anti-money laundering (AML).

Navigating the Challenges

Achieving this unified perspective comes with its own set of challenges and obstacles. Building and maintaining complex systems is technically challenging and resource heavy. Data may be scattered across different departments, systems, and platforms, making data analysis a complex and resource-intensive process. Financial institutions must also ensure seamless integration with various third-party providers. On top of it all, customer data must be protected.

This complexity makes ensuring the accuracy and consistency of customer data challenging. In a siloed environment, customer analysis requires a substantial amount of data cleansing and preparation, as poor data quality can lead to misinformed decisions. A financial institution’s bad decisions could damage its reputation and be life-changing for clients.

To overcome these challenges, financial institutions must invest in robust data management strategies, modern technologies, data analytics, and cybersecurity measures. Collaboration and communication across departments are essential to break down data silos and foster a customer-centric approach throughout the organization.

Consequences of a Fragmented View of a Customer

In today’s rapidly evolving digital landscape, consumers demand highly personalized experiences in secure environments across all touchpoints. This burgeoning demand has placed credit unions and regional banks in a challenging position, particularly those relying on legacy infrastructure.

Without a holistic view of their customers, these financial institutions are encountering numerous obstacles, such as:

1. Missed Business Opportunities

The absence of a complete understanding of customer behaviors and preferences can lead to missed opportunities to offer tailored products and services. This deficiency has serious implications, such as decreased customer engagement, reduced cross-selling potential, and lost revenue streams.

2. Inaccurate Decision-Making

Inaccurate or fragmented customer data may result in incorrect assessments of risk profiles, thereby making lending and investment decisions unreliable and potentially leading to financial losses due to misjudgments. Furthermore, without a comprehensive view, there can be inconsistent interactions and communications with customers. This inconsistency might force customers to repeatedly provide the same information, leading to frustration and a tarnished overall experience.

3. Compliance and Regulatory Risks

Alongside these issues, compliance and regulatory risks emerge. Stringent regulations like KYC and AML necessitate thorough customer due diligence, and failure to fully understand customers increases the risk of noncompliance, potentially resulting in regulatory fines and reputational damage. Furthermore, the dispersion of data across multiple systems enhances the risk of data breaches and unauthorized access, which may erode customer trust and lead to legal ramifications.

4. Operational Inefficiencies

From an operational perspective, the lack of a unified view can cause processes to become redundant and time-consuming, thereby increasing costs, hindering agility, and slowing responses to market changes. Additionally, a fragmented view can make it harder to detect patterns of fraudulent activities across various accounts and transactions, allowing fraudsters to exploit these gaps.

5. Lack of Competitive Edge

In an era where the customer experience is a pivotal differentiator, the absence of a 360-degree view of customers in banking can put financial institutions at a disadvantage compared to competitors that offer elevated experiences and excel in personalized offerings.

Benefits of Customer-Centric Banking

The push toward customer-centric banking is reshaping the financial industry. As consumer expectations evolve and grow, the importance of personalized, dynamic, and seamless experiences becomes paramount.

i2c’s unified platform can revolutionize banking and payments product offerings and elevate customer experiences for financial institutions. It allows a single view of each customer across core banking, credit, debit, and prepaid offerings. The platform facilitates personalization, minimizes friction, and enhances the overall customer experience.

Because our data architecture is built around the customer rather than individual products or services, our clients can access richer (and more accurate) unified data sets to achieve the following:

• Uncover opportunities for growth and innovation. Our clients do not need a team of data scientists to gather, cleanse, and prepare structured and unstructured data strewn across multiple data lakes, platforms, and more before analysis can even begin. With i2c, it is easy to uncover insights from their customer base.

• Ideate new products or enhanced offerings. Our clients identify trends with their customer base, including new areas for investment, new products to bring to market, and how to make better offerings.

• Inform business optimization. They can proactively answer questions like: Can we simplify the process? How do we make the entire experience seamless? How can I take early action for dissatisfied or delinquent customers?

• Supercharge hyper-personalization. Our platform allows our clients to cater to each customer’s unique needs and usage patterns. By narrowing to a segment of one — we call this customer-level servicing — banks can deliver more relevant offerings and deepen customer relationships versus servicing them in different silos.

• Improve cross-selling and upselling. Our clients can create more relevant campaigns based on their usage, behaviors, and needs. Moreover, customers can also easily migrate from product to product without losing the customer relationship view.

• Automate processes. Clients can automate through intelligent rules that trigger a pre-determined set of actions in real time — there is no analysis, list pull, or campaign development.

To achieve this comprehensive view, financial institutions must overcome challenges posed by legacy infrastructure, data silos, and more. Investing in a unified banking and payments platform like i2c’s can be the key to unlocking the full potential of customer relationships, driving innovation, enhancing security, and propelling business growth.

With the right tools and strategies, financial institutions can lead in this era of digital transformation, focusing on a customer-centric approach that builds trust, satisfaction, and long-term success.