Combining data, analytics, and decision management tools enriches insights, quantifies risk and opportunity, and makes decision‑making repeatable and consistently executed – all increasingly important for financial institutions as consumer preferences continue to include digital engagement.
Artificial Intelligence (AI) is the ability of a computer to do tasks that are regularly done by humans. This includes expert models that take domain knowledge and automate decisions, replicating the decisions the expert would have made without human intervention. Machine Learning models extract hidden patterns and rules from large datasets, making decisions purely based on the information reflected in the data.
For example, using analytics, institutions can better identify consumers with the greater propensity-to-purchase, which in turn helps a financial institution better allocate its resources. With analytic tools in place that extend beyond simply determining probability to recommending actions based on results, banks and credit unions can ensure the correct messages are presented and the customer/member relationship is fostered correctly.
Banks and credit unions can benefit from implementing analytics throughout the institution, but there are eight specific areas where analytics has the most impact:
- Measuring the degree of risk by evaluating credit, customer fraud, and attrition;
- Measuring the likelihood or probability of consumer behaviors and desires;
- Improving customer engagement by increasing the relevance of customer engagement content as well as engaging customers earlier in the process;
- Providing insight into the success or failure in the form of marketing, customer, and operational KPIs;
- Detecting and measuring opportunity in terms of customer acquisition, revenue expansion and resource/priority allocation;
- Optimizing pricing;
- Improving decisions based on credit, campaign, alerts, or routing escalation; and
- Determining intervention or corrective next action to reduce abandonment.
Banks and credit unions must find new ways to increase efficiency, improve business processes and scale to consumer volume in order to succeed in today’s competitive environment. Utilizing analytics helps support financial institutions in forecasting, risk management and sales by providing actionable data points that help them increase performance, predict outcomes, and better solve business issues which all equal to increased success and revenue.
To learn more about the role of analytics in digital delivery and how ARGO Connects can help positively impact your institution, view our interview brief.