SAS: Customer-centric banking

SAS has tailored its offering so that banks can derive real business benefits from regulation, rather than simply achieving bare compliance. Sales director Nicola Toombs explains how the company helps banks deal with the regulatory challenges, and identify where they can improve operational efficiency and create more customer-centric products.

How have you seen the needs and demands of financial institutions change in recent years? How has SAS tailored its offering accordingly?
Nicola Toombs: Under today's more stringent regulatory regime, retail banks face far greater reporting demands under their respective regulators. The accuracy, quality and timeliness of data is critical for regulatory and business-led reasons, yet many IT departments are swamped with bare compliance projects to cope with legal frameworks such as Basel III and the Vickers reforms. In particular, as a result of the new compliance agenda, retail banks are focusing their IT projects on data protection and privacy, complaints legislation and KYC, without gaining business advantages over competitors.
We believe that those banks that can harness big data will gain significant competitive advantage. In 2012 SAS commissioned research from the Centre of Economics and Business Research into the potential value of big data to the UK. This research identified that the Retail Banking sector could unlock a potential £6.4 billion by 2017 through harnessing the power of big data. At SAS we are now working towards helping the industry realise this potential.

What SAS software and methods can banks deploy in order to build more comprehensive relationships with their customers?
Two key areas are customer profitability and intelligent complaint management.
Customer profitability is an area where banks can move beyond traditional cost accounting and build sophisticated models that create a single view of the customer, enabling them to identify and sell the right product to the right customer in the most effective way. SAS's customer profitability solution enables banks to perform transaction level profitability modelling for an accurate and detailed picture of each customer based on their transaction history. By conducting a back-office cost analysis that ensures overhead costs are accurately allocated, banks can improve profitability models through automated data feeds, which reduce the time and effort to create up-to-date analyses. By identifying common and unusual patterns in behaviour for better insight and sharper decision making, efficiencies can be drawn from improved customer segmentation.
A key area to improving customer service satisfaction levels is with immaculate complaint management. Value is also drawn from proactively managing complaints and handling strategies, improving business performance and attracting fewer complaints in future.

The need for banks to create a 360° view of the customer remains a hot topic across the industry, so why are many players still falling short?
According to a survey of European banks, conducted by Ovum and sponsored by SAS, banks are currently focused on meeting regulatory demands rather than improving customer service. The banks that responded to the survey noted that while they want to improve customer service, compliance demands are absorbing attention and, crucially, IT budgets.
The irony here is that banks could implement big data solutions that address compliance issues while improving the customer experience at the same time. Big data analytics enables banks to more quickly and more easily extract relevant data for reporting purposes. However it also allows banks to analyse vast streams of structured and unstructured data to derive superior insights about customers, monitor fraud or model future risk scenarios.

How can banks employ mobile technologies to better address customer needs?
Not since the introduction of cards has one technology had the potential to change consumer banking habits as much as mobile does. Mobile has the potential to remove friction from banking. Consumers can check their balances wherever they are, shop online, pay for goods in store, pay other people or businesses, find out when they are reaching their overdraft limit, open a new account or check their spending habits.

Lastly, what, in your opinion, is the single biggest way banks can improve the customer experience?
Banks are sitting on a rich history of data about their customers. By using big data analytics, customer databases can be integrated with their transactional product systems, providing a clear view on the most appropriate and timely services for their customers. Retail banks should be looking towards social media platforms to monitor and understand consumer sentiment. SAS has worked with Deloitte to create a social media sentiment index called SentsCheck. SentsCheck provides detailed insights into why people take to social media to talk about their bank and more importantly, the sentiment applied to the comments. Social media is an unparalleled platform of customer feedback and banks should use this to create business benefits for themselves.