How can analytics drive retail banking?

In the fast-evolving landscape of retail banking, the role of big data and analytics cannot be overstated. A recent survey conducted by Capgemini revealed that over 60 percent of financial institutions in North America believe that leveraging big data and analytics provides a significant competitive advantage. Moreover, more than 90 percent of these institutions believe that their success in the future will be determined by their big data initiatives. As the global financial sector embraces the power of analytics to drive growth and profitability, how does the African experience, particularly in Nigeria, measure up? Robert Aderinmola, the Customer Insight and Analytics Partner at Diamond Bank, sheds light on how analytics are poised to transform and expand retail banking in Nigeria. A critical aspect that Robert emphasizes is the shift from merely possessing data to leveraging intelligence and analytics to turn data into a competitive asset. In the realm of retail banking, where maximizing returns on assets is paramount, the application of intelligence to data becomes instrumental in making faster, more accurate decisions. The ability to make well-informed decisions translates into deeper customer engagement, increased transaction volumes, and enhanced revenue generation for banks. Robert accentuates that analytics not only enable banks to make informed decisions but also empower them to deepen customer engagement by understanding customer preferences, behaviors, and potential product uptake. By harnessing analytics, banks like Diamond Bank can tailor their offerings to meet customer needs effectively, ultimately driving revenue growth. The incorporation of analytics into retail banking strategies is not just a trend observed in developed markets but also gaining traction in Nigeria. Several banks in Nigeria, including Diamond Bank, are strategically integrating analytics into their retail banking operations. By viewing themselves as data companies with banking licenses, these banks are aligning their strategies to focus on enhancing customer lifetime value, optimizing revenue generation, and promoting financial inclusion. In the case of Diamond Bank, a substantial 85 percent of customer transactions are conducted through alternate delivery channels, underscoring the shift towards digitization and data-driven customer interactions. The implementation of customer loyalty programs, such as Diamond Jam Zone, serves as a testament to the bank's commitment to rewarding customers and incentivizing increased engagement, further driving revenue streams. Looking ahead, the future of data analytics in banking lies in the ability to monetize data by applying intelligent insights to predict outcomes and scenarios. By delving deeper into customer preferences and behaviors, banks can unearth valuable insights that drive business growth and customer loyalty. Security concerns surrounding big data and analytics are paramount, especially in the financial sector. Diamond Bank places a strong emphasis on data security, with robust IT security measures in place to safeguard customer information and transactions. As banking operations increasingly shift towards digital platforms, ensuring data security remains a top priority to uphold customer trust and confidence. In conclusion, the burgeoning adoption of analytics in retail banking heralds a new era of data-driven decision-making and customer-centric strategies. As Nigerian banks like Diamond Bank embrace analytics to steer growth and innovation, the convergence of data intelligence and banking operations is poised to reshape the retail banking landscape in Nigeria and beyond.