Fintech Insights

Data is your friend in uncertain times

Tim Nargassans | Data Solutions Group, FIS

April 06, 2020

When everything around us changes overnight, we’re left wondering how to navigate new realities. In the moment, we sometimes forget that we can lean on old business principles, like old friends. One of the basic principles of business remains true: “It’s a lot harder to get a new customer than it is to keep an existing one.” And it is expensive too, especially in uncertain times. Customer acquisition versus customer retention is at least five times the cost, which means now is an important time to stay focused on your customers. Leverage your data to spot the changes in customer behavior and take relevant action to help them and while also stemming attrition.

You can learn from your data and prevent or minimize attrition

Credit cards are sometimes reported to have a 10-15% natural attrition rate. That means if you’re not growing by that much, you are losing market share. That’s a pretty hefty growth rate, now more than ever with all the competition out there, but what if you could reduce it? With dramatic shifts in consumer behaviors, comes the opportunity to learn. Just as natural attrition has key learnings, so does event-based attrition that is caused by market shocks. Every lost customer, regardless of reason, presents an opportunity for you to learn and grow. If you have the right combination of data, tools and partnerships, your business can continue to thrive, and achieve new heights.

Consumers will still make essential purchases and critical payments, but you likely don’t know how their buying needs have changed until you examine the data. Until they shift patterns, transfer cards or close their accounts, you won’t really know, and it may be too late unless you have the right toolkit. Maybe the decision to change institutions happened a long time ago when they realized you didn’t have a branch near their new home. Maybe they aren’t aware of all your digital offerings. Maybe you have world-class digital products but don’t do a good job marketing them. For example, I still have accounts at a credit union that’s 15 hours away, but I keep them for the service and world-class online capabilities. The bottom line is that your data showed a decline in their behavior. They had frequent travel to a new location to prep for the move, made purchases at merchants that are related to moving, etc. You had the data to save the customer but maybe not the analysis and tools to see it early enough. Perhaps you lacked real-time data-driven tools that enable immediate action so you could make the customer feel special with relevant and engaging messages.

Data can help you through these choppy waters

The truth is that we see these types of precursors in the data all the time. Maybe it’s a high user of debit that starts to show a decline, someone who starts closing secondary accounts, a person that makes a balance transfer on a credit card, or the loss of a direct deposit. The critical point is that you need to be able to act on what your data is telling you. The market standard has raised the bar and your customers’ expectations are very high.

The key is timely, relevant engagement. Having the tools to see the data, identify trends, and take near real-time action. Sometimes all that’s needed is an outreach that sparks a friendly conversation. This can be an opportunity to strengthen the relationship, show you care, and find that customer’s specific need so you can deliver a personalized and timely solution. In both hardships and good times, data can be a tremendous tool to help break the ice and build relationships. Whether it’s a difficult and unique circumstance or a simple lack of incentives, your institution can help weather the storm. To do so you need an ecosystem of data, tools, and processes that can help you connect and make a difference in your customer’s lives. Engaging in real-time actions that carry strong word of mouth and create a competitive differentiator cannot be understated. Now more than ever, changing the ethos of your institution and your customer base, with data-driven insights is critical. Become a crucial part of their financial success and well-being and they will be a life-long part of yours.

The great news is that you can achieve all of these wonderful things. There are people that care about your success, just like you care about your customers’ success. FIS is here and we’re committed to being that trusted advisor and partner, helping you navigate unchartered waters. We are committed to bringing you these critical data solutions with our Ethos ecosystem. Lean on FIS during these times and reach out to your relationship manager to learn more about how we can assist with your engagement programs. We’re here to help you, and your customers, through the coming months.