Aug
22
2014

No crystal ball? Try the next best thing

cm-814-410-Thumbnail-Calire-Hollins_TBTo build stronger relationships with your customers and avoid losing them to your competitors, you need to accurately predict and meet their changing financial needs.

January 2014 saw credit card borrowing rise to its highest rate since 2009, and the trend is the same for personal loans, which increased by £1,087 billion in March 2014*. This should be great news for lenders, but with more and more customers using comparison sites to find the best deals and loyalty at an all-time low, increasing market share and maximising per-customer revenues are major challenges.

To retain your existing customers and attract new ones, you need to anticipate their changing needs and offer them the right financial products, exactly when they need them. The challenge is that existing customer and credit data doesn’t give you all the insight you need to take this proactive approach. Sure, you can see how customers are performing with their credit card or loan payments, but that’s far from the full picture. To accurately predict when they are likely to take out a new credit card, mortgage or loan, and what kind of product they are likely to require, you need a far more granular view of their borrowing and spending behaviour.

Advanced analytics models derived from real customer spending and credit data, can show you exactly how your customers are using their financial products and how likely they are to take out financial products in the near future.

Models are available to help you identify customers who are likely to take out a new credit card, financial loan or mortgage in the near future. You can also identify customer ‘segments’ including those that typically carry high interest-bearing balances, are ‘balance-transfer surfers’ and so on.

By understanding customer behaviors, you can ensure customers are being offered the right products at the right time to meet their current needs. If an alternative product can save them money or improve their financial situation, you can help to make the move in the fastest and easiest way possible, helping to maximise satisfaction, increase repeat business and foster loyalty to your brand.

Customers will also benefit from your ability to understand their changing financial needs and offer competitive, suitable products just when they require them. This proactive approach to customer service can really add value above and beyond what your competitors provide, potentially increasing customer satisfaction and loyalty to your brand.

Your ability to anticipate customer needs for new credit cards, personal loans and mortgages increases sales opportunities and helps you personalise your marketing and customer service propositions.

Importantly, you can also identify where repeat business is a possibility and present those customers with personalised offers, helping you improve the success of your cross and upsell campaigns. You can also ensure that you are offering customers suitable products, helping you comply with responsible lending requirements and minimising your exposure to financial risks.

 

*Sources:

The UK Card Association.org, 2014

Payments Council.org, 2014

BBA.org, 2014

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