Fuel Customer Experience Gains with Bank Transaction Data

Customer & Bank Transaction Data

Banks and fintechs have been grappling with digital transformation for several years now. At this point, the industry is transitioning from acknowledging the need for digital transformation to taking real steps to embed digital capabilities into everyday operations. Organizations are still at highly variable levels of maturity, but continued maturation is leading to the rise of emerging technologies and solution models that drive positive change. Risk analytics platforms that take full advantage of bank transaction data are among such rising solutions.

Leveraging bank transaction data gives firms insights into cash flow patterns, makes it easier to identify fraud, and provides a more intelligent view into consumer and business financial habits. This makes the data invaluable in driving better customer experiences among banks, credit unions and fintechs that are launching digital transformation initiatives. What’s more, the continued growth of the digital transformation movement is fueling urgency to innovate quickly or risk falling behind.

Understanding the Digital Transformation Urgency

Financial services firms are moving toward digital transformation at a highly varied pace, and Gartner found that strategies among organizations can shift drastically depending on the level of maturity in their programs. For example, approximately 26 percent of global financial services organizations are still operating as traditional business and working to drive growth within their existing markets and strategies. Another 23 percent are in the early stages of digital transformation, and are beginning to rethink hiring and training to adapt to emerging demands.

Gartner found that the rest of the businesses in the financial services sector fall into one of three maturity spheres:

  1. Digital fast follower – a company that is moving quickly to keep pace with the competition.
  2. Digital innovator – an organization that has embraced digital and is able to take on new revenue and operational strategies in response.
  3. Digital transformer – a business that is driving disruption in the sector.

While the study found that half of all firms are still relatively digitally immature, the 26 percent of organizations that fall into the traditional business category simply don’t have an incentive to innovate. Their revenue streams don’t rely on digital interactions. The groups that aren’t innovators or transformers are simply falling behind.

Whether you’re a major regional bank looking to build your own systems or a community bank looking to tap into fintech platforms, moving toward the use of transaction data can be a springboard to further digital gains. What’s more, the benefits can be pointed toward customer experience improvements, which often serve as the primary motivator behind digital transformation projects.

Exploring Digitally Transformed Customer Experiences

Imagine a long-time customer needs a loan. They want to come to you, but to do so they have to fill out a paper application and wait a couple of weeks for your team to process the request. What’s more, because they have limited history or poor credit, they expect you’re probably going to decline them. Instead, they go to an alternative lender, get the funds they need in a few days and you lose out on potential revenue.

Digitally transformed banks can change that customer experience on a few levels. They can:

  • Simplify and accelerate application processes to make it easier for customers to explore getting a loan.
  • Leverage modern risk analytics capabilities to use broader data sets to assess risk, opening up opportunities to lend to those who traditional models would consider too risky.
  • Provide varied channels for customers to interact with the bank.
  • Be proactive and improve internal operations to better serve customer needs.

With a more convenient lending process, a hesitant customer is more likely to give your bank a try. With an updated credit decisioning model, your bank is strategically positioned to keep up and exceed the capabilities of alternative lenders. With bank transaction data, you can use factors like cash flow analysis and transaction categorization to better understand a loan applicant’s financial health.

Embracing digital technologies gives you a starting point to improve customer interactions and bolster back end processes that drive success. Using bank transaction data takes these benefits to another level.

Bank Transaction Data Unlocks Greater Degrees of Transformation

In its simplest form, bank transaction data lets you track every interaction a customer has with a bank. Each deposit and withdrawal can be categorized accurately and reported on to create a cash flow analysis that allows for sophisticated, nuanced predictive analysis and credit decisioning.

When you can use transaction data effectively, you can gain more visibility into consumer activities and more readily provide services. Whether you’re using historic data trends and spending habits to identify signs of fraud before they escalate or changing how you perform risk analysis to adjust your credit and lending solutions, the potential gains are great.

Banks and fintechs are embracing digital transformation in an effort to better keep up with shifting customer demands. Bank transaction data can advance your ability to keep pace with the market and unlock robust capabilities. Want to learn more? Check out our whitepaper, “The Evolution of Bank Transaction Data,” for a detailed look at what the technology entails.

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CLICK HERE to download our Whitepaper, “The Evolution of Bank Transaction Data”


About the Author

Carl Spilker, Vice President of Analytics
Carl is an accomplished executive within Global Consumer Lending, boasting over 20 years of industry experience. Carl has a proven track record in delivering consumer lending products and utilizing complex analytical instruments such as AI, Machine Learning and traditional multivariate models.

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