Business Impact of Code Halo Thinking

Banks realized a greater impact from business analytics 2012-2013 than any other industry.

Figure 1

Technology has changed many aspects of our personal lives, including how we shop, connect with friends, obtain directions and collaborate with colleagues. But one important aspect of our lives that has seen little if any transformation is how we withdraw cash. Upon inserting a bank card into an ATM, for instance, many U.S. customers still see a screen that reads, “Press 1 for English; 2 for Spanish.”

Really? A sophisticated financial services institution, with billions in assets and branches around the world, doesn’t know which language a customer speaks? The inconvenience is minor, but it underscores how ATMs operate only based on the transactional data in the bank’s systems of record rather than customers’ unique attributes that can be illuminated by analyzing the metadata contained in their Code Halos. 

To consumers, this disconnect can feel jarring, especially when their digital experience has been defined by Amazon, Netflix, Spotify and other Code Halo heavyweights. While innovative financial products and services are still the backbone of banking, deft handling of digital information will increasingly distinguish winners from losers in the financial industry going forward. 

Here are three keys to help banks succeed in improving their approach to digital customer engagement:

Put data at the heart of every interaction

Like consumer companies, banks can derive insight from the swirl of digital information surrounding consumers and their devices. In fact, the banking and financial services industry generated more value than any other sector from Code Halo thinking, according to our study. Analytics are proving especially profitable, the study found. Companies in the financial industry estimated their ability to make meaning from business information improved revenue by 10%. 

Embrace a customer-first culture

Customer experience extends far beyond basic demographic profiling. It requires a deep understanding of what makes each customer click as a human being: their needs, wants and banking preferences. Mining and aggregating customer interaction and transactional data from all banking channels is key to obtaining those insights, as is marshaling consumers’ online data — their unique virtual identity, or personal Code Halo — and delivering tailored offerings that spur loyalty and increase share of wallet. 

For example, banks can analyze customer social media activity and mobile location, as well as create customer personas to highlight motivations and propensities. Customer journey maps can also serve as an eye-opener, as many banks have so far only guessed at the routes that consumers follow. By integrating these insights with transactional data from their own systems and aggregated third-party information, banks can treat customers to a curated experience. 

Master multiple channels

In a world of mult-channel banking, banks need to determine whether any of their omnichannel interactions and transactions are leading to a poor customer experience. Success requires a detailed plan for analyzing customer preferences, providing cross-channel consistency and encouraging the use of lower cost channels. Imagine, for example, presenting contextual offers to customers at their preferred point of consumption. As customers present their debit or credit cards or mobile wallets for payment, they might receive merchant-funded offers that can be redeemed digitally. Or perhaps as they make ATM transactions, the screen could display targeted offers based on their web browsing history. The majority of customers are willing to volunteer more information to banks in exchange for these types of personalized service and simplified finances, according to Cisco. 

Next Steps

To start your path to a brighter digital future, we recommend the following:

• Define what digital means to your bank. 

• Prioritize governance behaviors and operations that improve customer experiences. 

• Shift from top-down reporting structures to autonomous teams.

• Remove organizational barriers and ensure that everyone owns digital — not just CIOs, CMOs, or chief digital officers. 

• Acquire, train and deliver customer-facing SMAC talent (aka social, mobile, analytics and cloud specialists), along the lines of Apple “Geniuses.” 

• Update your incentives (i.e., replace call handling times with net promoter scores).

• Launch training programs, revamp recruiting and rewrite job descriptions and promotion criteria to cultivate a digital environment.

To learn more, read Going Digital: What Banking Leaders Need to Know or visit our Banking and Financial business unit.