At its core, the financial industry is a data business. We find that 86% of financial institutions see data as an integral part of forming business strategies. Banks and other financial service firms have always relied on data to make informed decisions. From lending money and approving credit, to managing investments, business leaders rely heavily on information gathered from data. Still, as the volume of available data grows exponentially every year, many financial institutions are struggling to best understand who their customers are and how to meet their needs effectively.
The answer: Data enrichment. Data enrichment enables financial institutions to cater better to the needs of customers and make online banking more convenient while increasing efficiency through a tailor-fit user experience.
Data enrichment is based on real-world data obtained from customers that explore more than what is stated on an application. Let's take a look at what data enrichment is, its relevance to financial institutions, and the ways that data enrichment can help those in the financial sector make smarter business decisions.
What is data enrichment and how can it help financial institutions
Data enrichment are the attributes appended into a database—so you can get to know who your customers are and what they care about. Enriching the data can ensure that financial institutions don’t overlook valuable customer attributes, such as age range, marital status, financial data, buyer propensity, and automotive data. Not only could these changes be critical in helping institutions identify whether a customer is a risk or a good fit as a potential client, but it enables institutions to personalize their messaging and offerings.
Data enrichment can help banks increase their revenue as it improves customer service and enables them to make products relevant to customers based on their specific needs and desires. Utilizing data enrichment tools will allow financial institutions to take raw customer data, data that tends to be incomplete and unreliable, and turn it into an accurate and high-quality resource for better decision-making for marketing campaigns to loan approvals.
Data enrichment gives the financial industry a competitive advantage
Enriching your data is getting to know who your customers are and what they care about through appending insight to your existing records. With this insight, you can better understand your customers’ needs and help them achieve whatever financial goals they came to your bank or financial institution for.
Data enrichment gives banks and others in the financial sector a competitive advantage in this age where organizations are pushing to be more data-driven. Financial institutions with enriched data have an edge over those who don’t because it enables them to:
- Know their customers deeper than competitors by identifying trends in customer spending habits, product usage, and lifestyle preferences.
- Further understanding of what leads people toward certain decisions (like opening new accounts) so that banks can focus on initiatives that drive results for both parties involved in the transaction
- Find opportunities to partner with tech companies and other financial institutions (banks, credit unions) for innovations that could lead to collaborative partnerships or joint ventures where each party can leverage each other's strengths while helping themselves grow at a larger scale and increase their revenue.
How to get started
In the end, data enrichment is a powerful tool that can help companies of all sizes compete in this new data-driven world. Whether you're a small startup or a large bank, it is important for everyone in the financial industry to make sure their data is working as hard as possible for them. Data enrichment is a great way to do just that: By taking raw information and turning it into meaningful insights that can help your business grow.
As financial institutions continue their efforts to make sense of their data and develop more sophisticated ways of analyzing it, we expect that enrichment will begin playing an even bigger role in this process. If you haven't started enriching your data, connect with our team and learn how Experian can help you get started.
