Banks set to analyse more data
Banks are set to begin analysing customer data more closely to help them offer incentives and new services to customers, it has been announced. The move is set to follow in the footsteps of retailers who have been offering customers personalised benefits based on their shopping purchases for years. Financial institutions hope to use their customer’s data to boost spending, which would benefit merchants and banks.
Banks have always taken a much simpler approach than retailers when selling new products to customers. New credit card or mortgage offers are available to new and existing customers alike, depending on their credit profile. However, the banks have detailed customer data at their disposal that they are not using. The data can be analysed to determine their customer’s current spending habits and financial histories. It is common for customers to own several credit cards, all from different banks. Currently, customers lack the incentive to use one specific cards when making purchases, instead opting for whichever one has money available. Banks hope that these new plans will encourage customers to use their cards for transaction, in a mutually beneficial way.
Banks cannot make customers spend money that they don’t plan on spending. But, if they know that a customer is going to make a costly purchase in the future, they may be able to encourage the customer to use their credit card for that transaction by offering them a short period interest free period for purchases. This offer is uniquely beneficial to the customer and the bank will benefit from the transaction. Similarly, if a customer’s records show that they have been shopping for DIY goods recently, the bank can offer a £10 or £20 credit to the card holder if they spend more than £100 or £200 in the next month at a specified DIY store.
Although credit institutions are a mature industry, it is a fiercely competitive market. Banks have had this data available to them for a long time, and they hope to use it in new beneficial ways.
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