Brett King Bets Big On Small Data For Banking Growth
At a time when the industry is coming to terms with the benefits of Big Data and its mining for business planning, noted banking innovator and disruptor Brett King has opened a new thought by suggesting that it is not the big but the ‘small data’ that will drive future growth in the banking industry.
At a conference jointly organized by CXOToday.com and Oracle in Mumbai, King said banks need to reduce friction with customers in order to grow and future revenues may predicate on their ability to use small data as an intelligent intervention to help customers.
“The cross-sell and upsell revenue models aren’t working all that well now. Banks in India have a rate of between three to four percent revenues coming from this area while in the United States it is lower at about 2.6 percent,” he said while underscoring the importance of contextualization to revenue generation.
The small data points that banks continuously have access to needs to be utilized to provide timely interventions to customers by way of instant cash or a loan, he said while pointing out that such support would turn a customer’s bank account into an instant intelligent advisor instead of the person who tries to upsell and cross-sell to you at the bank branch.
“Imagine you’re at the supermarket buying grocery on the first of a month that happens to be a Saturday. It is highly likely that your salary hasn’t yet been credited. If your grocery bill is 2000 rupees and you’re short by one thousand, the bank app could offer you this amount at a small fee. This is how small data could be used contextually, he told delegates from various banks.
Similarly, if a customer is going to a car showroom, she’d definitely like to be surprised if her bank can identify the location, the cost of the car she’s looking to buy and provide a pre-approved loan based on the small data points they have of her credit worthiness, King said.
Having a mobile app is not innovation any more, he said while pointing out that the Bank of America spends a whopping USD 3 billion on this area of innovation, which in the future could be the only way banks could lure the ‘de-banked’ back into the ecosystem. “Asking Gen-Y to sign forms and luring them with products is passé as the youth rely on their social connect to decide and least friction as the deciding factors,” he concluded.
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