Data is King

David Steele Chief Technology Officer

In 2016 Microsoft bought LinkedIn for $26.2bn, it was a professional network of 443 million users of which roughly a quarter were active every month. Why buy LinkedIn for so much money – the answer is in the data. Microsoft now know where people work, what they aspire to do, where they went to school, who they know, what their interests and skills are. Overnight, Microsoft, a hardware/ software business transformed immediately into a B2B marketing and advertising agency.

But what does that mean to the typical adviser firm whose client bank is around 442,999,500 customers smaller than that of LinkedIn and nowhere near the B2B Social media price tag?

The key to building any successful business is anticipating and identifying customer needs, and then satisfying them in which both parties derive value. That means understanding your customers from the data that they voluntarily give you in order for you to give them advice.

Bank Statements tell a great story of the monthly activity, a credit report shows an attitude and utility bills demonstrate a keen eye for prudence. But how many times do we study the data we have at our finger tips?

We know that the challenge to retain and develop customer relationships by Banks and new entrants is going to grow, especially as so much more is driven by digital and importantly, mobile. How many of us now feel comfortable to tap our bank card or point a phone at a terminal, the generation who click and have a delivery the following day is growing. Adviser firms need to move up the value chain and not rely on the fact that the customer needs a mortgage, it won’t be long before the customer doesn’t need a human to tell them which is the most suitable two-year fixed rate.

Predicting the needs of customers and engaging with them earlier in the advice process will be key. Talking to parents about the housing needs of their grown up children, talking to children about the later life borrowing needs of their parents, or talking to tenants about their plans to move to homeownership. Ultimately the information all sits in the data capture process, and then having the time to really understand that customer’s needs now, and in the future.

For those firms who see their systems as a means of processing a mortgage or a life insurance policy, then they are missing the point of having a database. If you see certain fields on your system as irritants when they are not necessarily required for completing a mortgage application, then creating a long term future for your business will be hard work.

If you see the collection of information about your customer as a vital element of the advice process and an opportunity to future proof your business, then you understand the power of data.

Bank Statements tell a great story