# Why now is the time for banks to use their data to support customers Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-10-17 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: Supporting Consumers Through Financial Crisis: The Power of Data Meta Description: Discover how banks can utilise data insights to provide tailored financial help for individuals struggling with managing their finances in times of economic URL: https://financedigest.com/why-now-is-the-time-for-banks-to-use-their-data-to-support-customershtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/business-woman-at-work-as-advisor-in-office-financial-consultant-with-client-health-in-sbi-337358613-1736815016657-compressed.jpg) ![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/jason-foster-450x670-1736815016629-compressed.jpg) _By_ **_Jason Foster,_** _CEO and Founder, Cynozure_ [Energy bills](https://www.financedigest.com/energy-bill-support-pushes-uk-budget-deficit-to-february-record.html "Energy bill support pushes UK budget deficit to February record") are eye-watering. The value of real wage has all but stagnated. The cost of goods and services is through the roof, and talk of a [recession is growing](https://www.financedigest.com/euro-zone-economy-faces-growing-risk-of-recession-survey-shows.html "Euro zone economy faces growing risk of recession, survey shows") louder by the day. We are living through a hugely challenging financial time, the impact of which is being felt by consumers and [business owners across](https://www.financedigest.com/fintechs-support-of-ukraines-digital-businesses-can-be-used-as-blueprint-across-the-world.html "Fintech’s support of Ukraine’s digital businesses can be used as blueprint across the world") the country every day. We’ve all heard the advice – buy a new kettle, put tin foil behind your radiator, et cetera – but when it comes to tangible, personalised support there is, at present, still far more that could be done to help people to take [control of their finances](https://www.financedigest.com/funding-options-bids-for-backing-to-help-small-businesses-take-control-of-their-finances.html "Funding Options bids for backing to help small businesses take control of their finances") during this crisis. For [banks and financial](https://www.financedigest.com/financial-crime-is-the-chink-in-the-banks-armour.html "Financial crime is the chink in the banks’ armour") institutions, there is a sizeable opportunity to step up and use the swathes of data in their possession to provide valuable financial support to customers through times of crisis. **An opportunity to step up** As the caretakers of people’s finances, [banks are in a unique position to use the insights](https://www.financedigest.com/insight-into-tomorrows-retail-banking-customers.html "INSIGHT INTO TOMORROW’S RETAIL BANKING CUSTOMERS") they hold to provide tailored financial support for people looking for ways to better manage their finances. To do this efficiently and in the most impactful way for consumers, [financial institutions](https://www.financedigest.com/a-cloud-migration-guide-for-financial-institutions.html "A Cloud Migration Guide for Financial Institutions") must first understand and make strategic use of the data they hold. It’s fair to say that, for the most part, [data has historically been underutilised by banks](https://www.financedigest.com/open-data-represents-the-biggest-challenge-to-banks-in-a-generation.html "Open data represents the biggest challenge to banks in a generation"). Never before in history has there been a more opportune moment to change this. **Setting the right data foundations** There is a myriad of choices available to [banks when choosing](https://www.financedigest.com/5-things-to-consider-when-choosing-a-challenger-bank.html "5 Things to Consider When Choosing a Challenger Bank") a data platform that can fulfil its current and future goals. Most will have platforms and [data teams](https://www.financedigest.com/why-finance-teams-need-to-go-beyond-numbers-to-an-active-relationship-with-data.html "Why finance teams need to go beyond numbers to an active relationship with data ") in place already, but for those that don’t, there are a number of questions they should ask themselves before investing. These include – but are not limited to – factors including the identification of a clear set out outcomes – what needs to be achieved through investment? Is it possible to exploit existing technology rather than acquitting new tools? What technological capabilities are needed, and which should be prioritised? And are the right [skills in place for the organisation to truly reap the benefits of any investment](https://www.financedigest.com/quantamental-investment-trends-to-make-profits-through-creative-skills.html "Quantamental Investment Trends to Make Profits Through Creative Skills")? Investing in a [data platform and team can be a big](https://www.financedigest.com/the-benefits-of-big-data-how-to-convince-your-cfo.html "THE BENEFITS OF BIG DATA – HOW TO CONVINCE YOUR CFO") decision, and it is paramount that banks fully consider their options before taking the plunge. [**Offering practical help to those most in need**](https://www.financedigest.com/why-the-banking-industry-needs-to-offer-more-than-just-enticing-perks-and-subscription-services.html "Why the banking industry needs to offer more than just enticing perks and subscription services") [Harnessing the power of data is a critical tool for banks](https://www.financedigest.com/banks-struggle-to-harness-big-data.html "BANKS STRUGGLE TO HARNESS BIG DATA") when it comes to supporting the most vulnerable, and there’s a raft of support options that banks can consider deploying. At the most basic level, [sharing consolidated insights into a person’s spending](https://www.financedigest.com/spending-drive-knocks-spotify-shares-after-q1-beat.html "Spending drive knocks Spotify shares after Q1 beat") habits can be extremely useful. Giving this data back to the user, categorised and analysed, empowers them with the information they need to make more informed financial decisions that are more likely to have a positive [impact on their long-term financial health](https://www.financedigest.com/the-impact-of-debt-on-your-health-and-what-you-can-do-about-it.html "The Impact of Debt On Your Health, And What You Can Do About It"). Another use case is for a [bank to use its data to identify customers](https://www.financedigest.com/knowing-your-customers-needs-is-essential-for-banking-innovation.html "KNOWING YOUR CUSTOMERS’ NEEDS IS ESSENTIAL FOR BANKING INNOVATION") struggling with regular payments or bills and put support in place for them – perhaps proactively offering a payment holiday to help relieve pressure in the short term or extending a fee-free overdraft temporarily. While these aren’t by any means a long-term solution, it may prove a lifeline for someone who is finding it hard to make ends meet. [**Open banking**](https://www.financedigest.com/how-will-open-banking-impact-the-customer-experience.html "How will Open Banking impact the customer experience?") Open [banking is probably one of the best examples of how customer](https://www.financedigest.com/the-bank-of-me-why-banks-need-to-be-totally-customer-centric.html "The bank of me – why banks need to be totally customer centric") data can be used to make financial services fairer, and more inclusive and accessible for consumers. People are able to use their data for their own benefit – giving them access to more transparent, fairer products and services. Take borrowing as an example. Increasingly, we are seeing lenders embracing open [banking technology](https://www.financedigest.com/6-technology-trends-banking-2019.html "6 Technology Trends for Banking in 2019") as a way to gather better, more up-to-date information to allow them to better assess risk, affordability and vulnerability. Being able to view a potential borrower’s full, historical transaction data [gives lenders insight far beyond traditional credit](https://www.financedigest.com/smes-are-more-resilient-than-we-give-them-credit-for.html "SMEs are more resilient than we give them credit for") data, helping them to get a more comprehensive, up-to-date picture of an individual’s financial situation and ensure they aren’t lending to people who will struggle to repay. This has enormous benefits for consumers. To date, [fintechs have largely dominated the open banking](https://www.financedigest.com/fintech-v-the-banks-uneasy-bedfellows-or-a-match-made-in-heaven.html "FinTech v the Banks: Uneasy Bedfellows or a Match Made in Heaven?") space, but this needn’t be the case. Much of the financial information that fintechs use to build products and [services is data that banks](https://www.financedigest.com/20-billion-in-bank-service-fees-are-you-overpaying.html " Billion in Bank Service Fees: Are You Overpaying?") are likely to already be in possession of. In utilising this data to benefit their customers, [banks can ensure they remain competitive and don’t lose out on market](https://www.financedigest.com/in-a-rising-market-are-banking-outsourcers-pulling-their-weight.html "In a rising market, are banking outsourcers pulling their weight?") share through customers using other apps to track their finances. **Benefits to banks** The benefits to [banks of using data to increase support to customers](https://www.financedigest.com/how-will-the-introduction-of-digital-banking-impact-customer-perception-and-overall-loyalty.html "HOW WILL THE INTRODUCTION OF DIGITAL BANKING IMPACT CUSTOMER PERCEPTION AND OVERALL LOYALTY?") are undeniable. It allows them to meet regulatory requirements which have been stricter during the pandemic, and – to put it bluntly – it looks good for them to go above and beyond during the [cost of living crisis](https://www.financedigest.com/5-ways-to-support-your-employees-during-the-cost-of-living-crisis.html "5 ways to support your employees during the cost of living crisis "). Doing so can have positive [knock-on effects](https://www.financedigest.com/banking-turmoil-will-not-have-knock-on-effect-on-commodities-trafigura-cfo.html "Banking turmoil will not have knock-on effect on commodities -Trafigura CFO") when it comes to customer retention and acquisition. With the media scrutinising their every move, and the Competition and Markets Authority (CMA) publishing [rankings](https://www.gov.uk/government/news/customer-survey-ranks-banks-amid-cost-of-living-crisis) to show how well banks are looking after their customers, it is no exaggeration to say that it’s a reputational risk for financial institutions to carry on as normal during this time. [Data is the key](https://www.financedigest.com/2023-fintech-prediction-secure-and-private-data-usage-is-key.html "2023 FinTech Prediction: Secure and Private Data Usage is Key"), and banks should act now to ensure they’re making full and proper use of the customer insights they hold. This means designing, building and actioning a comprehensive data strategy that empowers them to support [customers with personalised advice that will make a real positive change](https://www.financedigest.com/talk-to-me-the-changing-face-of-customer-communications.html "TALK TO ME :THE CHANGING FACE OF CUSTOMER COMMUNICATIONS") to their day-to-day finances. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---