iPhones fail to deliver for banks

Beverley Head
Friday, 25 February 2011 10:28

Business IT - Networking

Forget iPad and iPhone apps or whizz bank online banking - it's customer data aggregation and information analytics that are the stand out performers in banking technology.

A survey of 1270 Australian bank customers and 113 bank marketing executives, found that it was analysis of the information the bank already captured about its customers that was having some of the most profound impacts on its success, rather than fancy new apps. Poorly targeted bank communications, or SPAM, was identified as irritating by almost one in five customers.

Lee Gallagher, director of precision marketing and sales at InfoPrint one of the sponsors of the research, described this scattergun marketing approach as 'spray and pray.' Whatever it's called customers don't like it.

In fact it's not technology that floats their boats at all - what they want is better service and lower fees and charges. In fact just 15 per cent of customers considered that their banks were technology innovators, and 29 per cent expressed concerns about data loss and security breaches.

Of course for many banks, judicious use of technology is what ultimately allows better service and lower costs to be delivered. Nevertheless according to Mr Gallagher there remains something of a disconnect between how the banks are spending on technology and what technologies actually deliver benefits.

Of the 73 per cent of banks which had invested in customer data aggregation and analytics, a remarkable 100 per cent of marketers said they had been able to better target communications with their customers - giving them a better chance of tackling the 12 per cent churn rate that is pretty standard across the banking sector. Asked what would improve bank marketers' visibility into customer retention, profitability and lifetime value, 88 per cent responded that it would be better access to real time customer data and analytics, aided by the management and technical support to deliver that.

Keeping close to the customer is a real issue for banks given the 12 per cent churn rate.  And given the fact that 44 per cent of Australian bank customers said they had shopped for a new bank in the last year, the risk of even higher churn remains.

The survey of retail banking was conducted by the CMO Council in association with InfoPrint Solutions and Computershare, and released in Sydney this week.

According to the report 'It may not be as 'sexy' as a new iPhone app, or as alluring as a new website chalk (sic) full of information and community, but customer centred precision marketing strategies can make a sustainable business growth plan in even the most competitive market.'