Turning Data Into Marketing Intelligence for a Better Borrower Experience

Credit unions and community banks are entering a more competitive market, especially with consumer and auto loans. Fortunately, lenders have learned they can carve out a competitive advantage by offering a better borrower experience.

Inflation is driving up the price of cars, making it more challenging for dealers to move vehicles off their lots. Any friction in their process can be enough to turn buyers off.

On the consumer lending side, while data from TransUnion suggests that demand for these loans is increasing, more competitors continue to enter the space. McKinsey has been encouraging companies to enter the space for the past year, and PriceWaterhouseCooper’s research shows that “disruptors continue to make inroads, particularly amongst millennials.”

Meanwhile, borrower expectations are extremely high. We can point to the big technology firms for much of this. The so-called “Amazon Effect” has changed everything for consumers, from shopping patterns to service expectations. It falls to us to meet those expectations. To do that, we need data.

Lenders have access to the data to deliver this kind of experience. Unfortunately, most lenders have yet to make the connection between their data warehouse, business intelligence (BI) software and marketing automation platform (MAP).

By integrating business intelligence with marketing automation, lenders will have a clearer picture and understanding of their borrowers and will be able to tailor experiences to meet the needs of those they serve. Further, it will require them to think differently about the way they’re using their data.

Capitalizing on Plentiful Digital Information

Data is very likely the most valuable currency in business today. That’s good news for financial institutions because they are awash in data. Every product or service delivered to a consumer comes with its own payload of consumer information that the lender can use.

In the past, this data was trapped in paper files and inaccessible to management. High-level reporting was tedious and rarely offered more than just trailing indicators of the institution’s performance. Even so, management used the information at hand to make decisions that served to guide the enterprise.

Today, we have the opposite problem. Management is floating in data about their borrowers but often lacks the analytical power to turn data into vital insights.

That’s changing, of course. With powerful BI tools, institutions can glean more actionable insights from their data and make better-informed decisions. Typically, we see lenders using this information to evaluate performance across branches or by product type, allowing them to make changes that will keep them competitive.

Unfortunately, lenders own a great deal of data that they never touch and that never gets into their data repository. This unstructured data is virtually invisible and unusable until it gets into the data warehouse.

Strategic uses of data are beneficial for financial institutions, but by coming down to the loan or consumer level, they can make tactical decisions that can win them more business in the short term. The key that opens the door to this opportunity lies in connecting the BI platform to a marketing automation platform.

The Smartest Place to Leverage Business Insights

It makes sense to utilize data to make better strategic decisions, but it can be even more useful as a tactical tool. Acting on data intelligently is what drives borrower relevance. Customizing offerings to a particular borrower based on our available data offers a significant competitive marketplace advantage.

Consumers want a personalized experience. In fact, current data from Forbes suggests 71% of consumers will feel frustrated when a shopping experience is impersonal. According to ClickZ, some companies are paying third parties to provide personalization reports for their customers and reporting a 20:1 ROI.

Our data shows that 90% of financial institution executives know that BI is important for their institutions. However, only 40% of lending institutions are actually using some form of BI on their data, allowing them to create new dynamic reports that offer clear insight into what’s really happening.

We’re not seeing more executives leveraging BI because many community banks and credit unions that have invested in new BI initiatives over the past few years are still struggling to achieve satisfactory returns on those investments. We would argue that they are not using these insights as effectively as they could be.

Lenders should also leverage this insight to personalize experiences for their borrowers. Personalization lets borrowers know that their financial partner understands them and their needs. In the past, this wasn’t easy to deliver, especially for lenders where transactions are often separated by years. It’s significantly easier today. Lenders have enough information on the consumers they serve to create personalization reports.

A New View of Market Intelligence

Every marketing department searches for market intelligence, especially when competition heats up. Most will use this information to make strategic decisions.

The information they seek is already in-house. By building and maintaining sound data repositories and then using BI software to feed data into their MAP, they will have a new view into their business. Not only will it deliver information that will drive better strategic decisions and outcomes, it will provide insight into product utilization, by consumer, at scale.

The result from the borrower perspective is an institution that truly knows them and understands their needs. It’s just a matter of connecting the technologies lenders are already using – BI and marketing automation – for a better experience.

Credit unions that make the connection are seeing higher NPS and member satisfaction. This will allow them to drive loan growth, deposit growth and even non-interest income, such as by cross-selling insurance products, giving them the power to grow in a highly competitive market.

Ken Burns EVP, Sales Origence Irvine, Calif.