Decision-making in financial services has always been more data-obsessed than other sectors. Even at a time when other sectors relied on “gut feeling” of a few leaders on the board, the financial services sector – thanks to regulatory controls and sensitivity of financial matters – made insight-led decisions by diving deep into customer insights like credit history, demographics, income, net worth, individual networks in the form on guarantors and more.
Over the years, this need for data-centricity in the banking and financial circles has only grown. One of the biggest challenges that the financial services sector faces today is addressing the hyper-personalized service and communication expectations set by technology giants. Financial services customers demand that their user experience mirrors the speed, simplicity, and convenience they are now used to across their interactions with brands from other sectors. Fintech – with its access to humongous digital and mobility data – is also putting unprecedented pressure on traditional financial services brands to ramp up their data-obsession for a whole new world of “phygital” customers.
Banking and fintech services will finally see the light with human mobility as an alternative data set
Human mobility can prove to be a goldmine of alternative data for the financial services sector. This is in equal parts thanks to the penetration of smartphones among consumers and the openness of visionary, forward thinking financial services brands and their commitment to meet customers where they are, in ways that these customers expect them to. Following are a few ways in which human mobility – as an alternative data source – can have a far-reaching impact on the sector.
Deeper, more holistic consumer insight
Players like PayTM and Amazon Pay are becoming the new norm in financial transactions around the Asia Pacific region and are even entering spaces like lending and credit – the erstwhile playground of large banks alone. This has forced traditional banks to re-look at their technology investments. The future of financial services is about true, customer-centric innovation – in both product offerings and services. Human mobility data will play a significant role here, in informing banks and financial institutions about the finer nuances of their customers’ personas beyond the KYC document. With the powerful combination of previous data points and predictive modeling, mobility data will bring to light purchase habits, lifestyles, branch banking needs, and more and will help banks get a better grip on customers’ personalized, individual financial needs. Consequently, they will be able to deliver stronger services portfolio as well as hyper-personalized user experiences and effective marketing communications. Consider the example of this leading credit card brand in Southeast Asia that leveraged mobility data for deeper consumer insight, which eventually enabled them to deliver hyper-contextual digital campaigns and measure campaign performance more effectively.
Optimizing locations, services, staff
Thanks to increasingly omni-channel customer behaviour, the financial services sector needs to understand exactly which services customers need online – on their apps or bank website – and which ones they still expect in physical locations such as ATMs and branches. Optimizing ATM locations based on footfall traffic, optimizing branch locations and services as well as relevant staff resourcing at these locations, enhancing mobile banking experience and services are all effective outcomes of human mobility data at work.
Becoming a powerful partner to governments’ financial inclusion agenda
Governments around the world have been attempting to bank their underbanked and underserved citizens, but they have not really been able to make it happen beyond very basic banking services such as a savings account. Most of the unbanked population continues to be discounted from services like lending and credit. This is because for most of the unbanked population around the world – and especially in the Asia Pacific region – there is no existing credit history. It has therefore been near impossible to find data sets that enable testing, analyzing, and validating the ability to contribute to the banking ecosystem, repay loans, or even their willingness to repay. This is where human mobility data can help. Fintech companies and the financial services sector have a huge opportunity with alternative data sets such as location and mobile intelligence in order to determine factors like verified home and work addresses, in the absence of government-mandated address proof documents for many among the underbanked. Beyond that, these data sets also provide deep insights into customer behaviour – where they go, how frequently, and what these frequented locations mean for credit eligibility among other banking services.
Is the financial services sector ready for the power they can yield with human mobility data?
It’s about time. Human mobility data can help banks and financial institutions come of age and become relevant to the new consumer – the on-the-move, connected, affluent millennial. They will finally transform their services, products, locations, and communication in keeping with the times.