Published on the 22/11/2023 | Written by Billy Loizou
Resolving identity key as third-party cookies crumble…
The digital transformation of the traditional banking sector is creating a boon of digital and data opportunities to meet the needs of today’s digitally savvy consumers.
With nearly all (98.9%) of customer interactions now taking place via apps or online in Australia, this transformation provides financial institutions with a unique opportunity to use data to improve customer loyalty and drive growth.
“Legacy systems are not well-equipped to handle the volume and complexity of customer data”
Banks are sitting on a goldmine of untapped potential – first-party data that unlocks insights into customers’ needs and preferences. This data is the key to anticipating consumers’ needs and improving digital experiences, replacing a reliance on third-party cookies to target marketing efforts.
Let’s take a look at how to maximise the impact of first-party data to remain competitive, serve customers and grow revenue.
‘First’ things first: Collect the right data
Financial institutions must be aware that digital advertising is on the verge of a significant disruption due to the impending deprecation of third-party cookies. Traditionally, third-party cookies were the easiest way to secure customer insights and deliver personalised marketing outcomes. However, their value will soon diminish, and internal marketing, technology and data teams will be left to identify alternative ways to gather and act on customer preferences.
Without third-party cookies, banks will have limited access to customer data from external sources, making it harder to deliver personalised ads and marketing campaigns. Though third-party data collection is becoming a thing of the past, banks can invest more into gathering and organising customer data with new tools and cutting-edge platforms.
By using data that customers entrust to their banking provider, such as transaction history, product and service usage data, credit histories and customer service trends, banks can ensure that their efforts remain effective and compliant with new privacy restrictions.
First-party data, when collected and used ethically and securely, allows financial institutions to optimise their marketing strategy and better serve their customers.
Invest in the Right Technology
Though the financial sector has tried to modernise for decades, many financial institutions still operate on legacy systems that are not well-equipped to handle the volume and complexity of customer data. These systems often create incomplete data, which results in fragmented customer journeys, inaccurate information and a lack of real-time insights to inform business decisions. Additionally, increasingly stringent regulations, such as Australia’s Privacy overhaul, introduce an element of complexity for businesses to manage customer data and pose challenges in terms of data compliance.
Banks often rely on legacy systems for most processes, including marketing efforts. These outdated systems can struggle to resolve a unique identity across financial products and platforms. Leading banking and financial service providers have invested in a Customer Data Platform (CDP) to help resolve this issue. CDPs serve as invaluable tools for ensuring compliance with various data protection regulations, vital to enhancing both consumer trust and brand integrity. But beyond that, they allow financial institutions to aggregate and cleanse data to identify actionable insights and drive tangible results for their business.
These platforms also empower banks to tailor experiences to different customer segments. For instance, by analysing first-party data, banks can gain deep insights into their customers’ personal circumstances. This allows them to predict major life milestones that might prompt financial needs, such as buying a home, purchasing a new car or requiring additional lines of credit.
At the same time, the institution can use its data to better meet the needs of younger, digital-native customers – which is especially important with Gen Z and Gen Alpha burgeoning as a significant segment of the consumer market. And given how simple it is for consumers to switch banks, routinely providing relevant, timely offers along with personalised digital services are imperatives that banks can’t ignore.
Single Source of Truth
Creating a “single source of truth” with a CDP means building a central, unified repository of all customer-related data. It helps navigate privacy and compliance regulations while resolving the complexities associated with customers using multiple identifiers, such as various email addresses or phone numbers. By consolidating various identifiers into one comprehensive customer profile, a CDP enables more accurate targeting, personalised communication, improved customer service, and more effective strategies to attract and retain customers.
However, the efficiency of this process heavily depends on the sophistication of the CDP, the quality of the data integration and the protocols used for data privacy and security. With the wide range of capabilities available across CDPs, banks should look for the features that align best with their specific business goals, the size and skill set of their team, their data privacy obligations and the other tools already in their tech stack.
About the Author
Billy Loizou is Area Vice President for Amperity. With 15-plus year’s experience in design, technology and marketing he has worked with some of the world’s most respected brands, helping improve customer experience and drive profitability.