The focal point of global digital transactions is data. PWC’s Payments 2025 & Beyond report tells us that payments are responsible for generating around 90% of a banks’ ‘useful customer data’ - which in essence is information about who buys what, how much, and when.
Yet, if we dig a little deeper into that, a problem for most companies is their data quality. Poorly inputted records can lead to erroneous reports that cause financial institutions to draw conclusions about the wrong things. Worryingly, Forbes tells us that 27% of business leaders are not sure how much of their data is accurate, opening companies up to a whole host of issues if their data is not cleansed.
With artificial intelligence (AI), a ‘game changer’ for the future of digital banking, relying heavily on the depth and breadth of collected data to operate effectively, the need for clean data is more critical than ever.
Let’s jump in and see how customer experiences (CX) are changing owing to the rise of digital banking, and crucially, see what business leaders can do about their less-than-perfect data collection.
Usage and Adoption
With the pandemic raging on, the adoption of digital has been wide-reaching. Chase conducted a study to analyze the impact the pandemic has had on digital adoption, finding that of the 1,500 consumers profiled, 54% agreed that they use more digital banking tools than they did last year.
In a recent Loqate study, we found that 91% of respondents have used some form of digital/mobile banking service, from mobile checking to stock trading applications. Unsurprisingly, mobile banking features were the most popular: 32% of consumers used bank mobile apps for day-to-day activities traditionally reserved for in-person banking at a branch or ATM.
Allison Beer, Head of Digital at Chase, continues to state how “the pandemic has demonstrated that digital banking is essential for consumers of all ages to confidently manage their finances.” Now that we have reached this moment of acceleration, there is no way of going back to how things used to be, and legacy banks will need to accept this if they are to compete with the newer, digitally-native players in their industry.
IBM says “there's no reason established banks can't leverage their data like a fintech to offer consumers new products and experiences” - which only makes the case for digitization and uprooting of legacy practices all the more vital for survival.
When collected and maintained correctly, verified data can amplify customer experience as information from different sources can be drawn quickly to be used together to gain deeper understandings of customer behavior.
Consumer Trends
Banks need to cater for today’s customer. Their journeys are no longer A to Z; they are oftentimes spontaneous and unpredictable. With the rise of digital banking, brands can no longer rely solely on learnings from interactions within their branch - if they in fact have a branch - now, they can happen anywhere, at any time.
Customer journeys are complex, and today’s banking customer is even more demanding, needing services at the touch of a button as well as the promise of security for their data and personal information. Digitally-native banks now offer 24/7 support, with virtual identity checks and bill splitting as standard.
It’s a sad state of affairs when you look at some legacy banks that are only just starting to digitize their organization’s structure and failing to keep up due to poor customer data and unoptimized online customer journeys. To save companies from going under, they must lean more heavily on tools that ensure data quality, prioritize trust and enhance CX.
The more you can verify about a customer, the better. But 47% of consumers say they “strongly dislike” additional steps in verifying their identity. Address, phone, and email validation can help increase consumer trust without increasing friction, preventing fraud by accurately matching customer data.
The Need for Clean Data
Understandably, the efficacy of AI to better customer experiences rests upon the accuracy and breadth of available data. Yet, Forbes reports that approximately 27% of business leaders aren’t sure how much of their data is accurate.
Data quality is the foundation of any customer management strategy, and when it’s done correctly, the positive outcomes cascade throughout the organization - from impacting profit margins to directly influencing customer experience.
If data is of low quality, any business decisions made on that data will be ineffective - which is why data cleansing is critical to ensure an acceptable level of data integrity, keeping both board members and customers happy.
How Loqate Can Help
Loqate’s solution will parse, standardize, verify, cleanse and format address data that enters or already exists in your system via a single, easy-to-integrate API for all 249 countries and territories. The solution has a proven track record in providing customers with global data, powered by our superior parsing and matching engine.
With best-in-class global datasets and technology engines, Loqate enables both customers and partners’ to significantly enhance the functionality and capability of their own product offerings.
Being a trusted partner to businesses around the world, our expert teams will work with you to understand your requirements, creating tailored solutions to fit your needs and to help you reach your business goals.
To find out more about how Loqate’s solutions can help your business get up to speed in today’s digital-first world, speak to a member of the partner team today.
