Fintech
How banks can leverage transactional data for unprecedented customer engagement
Of Johanan Devanesan
May 31, 2024
In a recent Fintech Webinar Fireside Asia titled “Monetising Transactional Data in Banking with Impactful Engagement”, banking and fintech experts came together to discuss how banks can leverage their vast transactional data to drive customer engagement, increase customer lifetime value and amplify business impact.
The panel featured Colin Dinn, Chief Transformation Officer of Vietcombank; Nauman Bashir, Head of Digital Management and Customer Value at Standard charter; Mukesh Pilania, Executive Vice President and Head of Digital Banking at Techcombank; and Dorel Blitz, Vice President of Strategy and Business Development at Personetics. The discussion was moderated by Urs Bolt, a fintech and banking industry veteran.
The evolution of data use in the banking sector
Colin Dinn kicked off the discussion by tracing the evolution of data use in banking over the past few decades. He noted that before automation, banks had the richest data set thanks to personal interactions with customers. However, as automation has increased, banks have lost some of that intimate customer knowledge.
“Through automation we’ve lost a lot of that, and now we’re trying to figure out how to get it back,”
Colin said.
Colin Dinn, Head of Transformation, Vietcombank
Banks have since gone through phases where they view transactions as expenses, drive for convenience and adoption, collect transaction data, and use the data to make credit decisions.
Colin highlighted the importance of data privacy as banks advance their use of transactional data, saying:
“Data privacy is paramount. Data privacy is the overriding factor in any use of data and we will use it in the future. And it’s a governance issue that every single bank takes very, very seriously.”
Trends in the financial services industry
Nauman Bashir shared insights into trends in Singapore, which he described as “leading the way in many areas of how data is used effectively.”
He highlighted regulatory sandboxes, digital bank licenses, open banking systemAND APIs as key developments that have driven innovation and improved customer experience.
Nauman also noted the success of Trust banka digital bank launched by Standard Chartered in partnership with a local e-commerce operator, which has attracted nearly a million customers and built a strong balance sheet in just two years.
Mukesh Pilania, EVP and Head of Digital Banking, Techcombank
Mukesh Pilania discussed trends from an emerging economy perspective, highlighting the growing demand for ESG and green finance products. He also highlighted the importance of using digital solutions to improve the capabilities of offline channels and create “super relationship managers”.
Mukesh said,
“Obviously there are real-time deals, and then how can we holistically connect the entire end-to-end journey of a customer, from payments to say a wealth, and how can you deliver everything on digital.
And don’t keep digital just for end users, but also use it to enhance the capabilities of your offline channels and branches and make your relationship manager a super relationship manager by providing them with data-driven technology solutions.”
Implementation of data-driven strategies
When it comes to implementing data-driven strategies, Dorel Blitz emphasized the importance of starting with a well-defined business case and strategy.
“It’s never about technology; technology already solves most problems. It’s really about starting with defining the business case and the strategy to support it,”
Dorel said.
He also highlighted the importance of considering how banks want to deliver value to customers and what the right channels are to increase customer usage.
Dorel Blitz, Vice President of Strategy and Business Development, Peopleics
Mukesh Pilania of Techcombank agrees, adding that data quality and governance are crucial preconditions for a successful implementation.
“Imagine that any tool is only as good as the quality of the data you have. If your data isn’t clean, isn’t properly governed and structured, many of these implementations will fail.”
he warned.
Mukesh suggested starting with a pilot project, refining it based on the results, and then implementing it while continuously refining the approach.
The role of subsidiaries in a data-driven world
Speakers also discussed the role of subsidiaries in a data-driven world. Nauman Bashir emphasized that branches will continue to play an important role, particularly for high-value transactions, advisory services and relationship building.
“The value of human touch and personal interaction is extremely precious and will remain so”
He said.
Nauman noted that branches can serve as experience centers, where customers can provide feedback, participate in financial literacy workshops and exchange ideas.
Colin Dinn, Chief Transformation Officer of Vietcombank, echoed this sentiment, saying that the branch will not be closed anytime soon.
“We should never underestimate the value of a branch, because it’s where we really get that personal contact,”
He said.
Colin also questioned the concept of individual channels, arguing that banks should focus on creating a common sales and service architecture that integrates digital and data capabilities across all channels.
Collaborate with Fintech and new players
When asked about collaborating with fintechs and new players, Nauman Bashir acknowledged that while banks are not traditionally known for being open to collaboration, the situation is changing rapidly.
Nauman Bashir, head of digital and customer value management, Standard Chartered
“I think there’s so much value in collaboration that a bank alone can’t do or a partner other than themselves can do,”
He said.
“They can’t create that experience, service or product for the customer unless they come together.”
Nauman cited examples such as Trust Bank and partnership with buy now, pay later suppliers as successful collaborations that created value for customers.
The future of artificial intelligence and human capital in banking
Speakers also addressed questions about the impact of Generative AI on legacy technology issues and the future of human capital costs in banking. While recognizing the potential of AI, they cautioned against overestimating its capabilities.
“I think not in the near future. First of all, I think there’s a lot of excitement about generative AI, etc., and AI taking over the world, and then humans won’t be necessary. I think that’s a long, long way away,”
Mukesh Pilania said.
He suggested that artificial intelligence and technology will be used to improve the skills of human bankers, creating “Ironman suits” that give them knowledge and data to better serve customers.
The role of transaction data and artificial intelligence in the future of banking
As banks continue to navigate the evolving landscape of data-driven customer engagement, it is clear that transactional data has immense potential to drive business impact and improve customer experiences.
By focusing on data quality, governance and strategic implementation, and embracing collaboration with fintechs and new players, banks can unlock the power of this valuable resource to create more personalized, proactive and impactful interactions with their customers.
While technology and artificial intelligence will undoubtedly play an increasingly important role, panelists agree that the human touch provided by bankers and branches will remain essential to building trust and deepening customer relationships.
Watch the full webinar “Monetizing Transactional Data in Banking with Impactful Engagement” at Fintech Fireside Asia YouTube channel:
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