Data Analytics in Online Banking: How Financial Institutions are Improving Security, Customer Experience, and Decision Making
Data analytics and online banking transactions have become increasingly intertwined in recent years, as financial institutions seek deeper insights into their customers’ behavior and preferences.
According to the Salesforce report of 2019, which surveyed 8,000 business buyers and consumers worldwide, 84% of consumers believe that a positive customer experience is just as important as the products and services offered by a business. In today’s digital landscape, Financial service institutions such as banks need to adopt innovative business models that cater to the preferences and needs of their customers. This helps them to improve their products and services, as well as identify potential fraud and other risks.
Analytics in Action
One key area where data analytics is being used in online banking is in the detection of fraudulent transactions. By analyzing customer data patterns, banks can identify unusual or suspicious activity that may indicate fraud. For example, a sudden change in location or spending habits could signal that a customer’s account has been compromised.
Data analytics is also being used to help banks understand their customers better. By analyzing customer demographics, spending patterns, and other factors, banks can gain a deeper understanding of who their customers are, what they need, and how to serve them best. This can help them to create more targeted marketing campaigns, as well as to develop new products and services that meet the specific needs of their customers.
Some of the specific ways that data analytics is being used in the field of online banking include:
- Customer segmentation: Financial institutions use data analytics to group customers based on their characteristics, such as demographics, behavior, and preferences, which allows them to target their marketing efforts more effectively.
- Risk management: By analyzing data on online banking transactions, financial institutions can identify potential fraudulent activity and take steps to prevent it.
- Personalized recommendations: By analyzing customer behavior and preferences data, financial institutions can provide customized recommendations for products and services that may be of interest to them.
Another area where data analytics is being used in online banking is optimizing the customer experience. By analyzing data on customer interactions, banks can identify areas where the customer experience can be improved. One real-life example of data analytics being used to optimize the customer experience in online banking is JPMorgan Chase’s use of data analytics to personalize their right channels. The bank uses data analytics to track customers’ usage patterns and preferences on the app, and then uses this information to create personalized dashboards for each customer. This allows customers to easily access the features and services that are most relevant to them, which improves their overall experience.
At Amihan, we have the Amihan Analyze platform, a fully-integrated data analytics solution that allows businesses to accelerate time-to-insight. It combines high-speed data processing, parallel and distributed query engine, and the flexibility of Apache Kafka and Apache NiFi. This powerful tool allows banks to analyze customer data in real time and make faster, more data-driven decisions.
Overall, data analytics is playing an increasingly important role in the world of online banking. By using data to gain deeper insights into customer behavior and preferences, Analytics can also be used to identify potential risks and opportunities, improve products and services, and better serve the needs of customers.
Amihan is a digital transformation partner that helps companies benefit from opportunities, enhance customer experiences, and develop capabilities through best-in-class digital, data, and cloud services.
Our services include Digital Strategy Consulting, Innovation as a Service, Cloud Enablement, Infrastructure, Managed Cloud Services, and Resilient Operations. We also offer a variety of cloud and data analytics solutions.
To learn more about Amihan, please visit our website: https://amihan.net
Bernadette Valerio is a Marketing Associate at Amihan Global Strategies and an experienced graphic designer.