Even though 83 percent of financial institutions across the Asia Pacific region claim that their C-level executives are committed to analytics, only 68 percent of them are ready and willing to compete on analytics.
The gap explains the "significant investments" that financial institutions are allocating for data analytics projects, said Rocky Scopelliti, group general manager for Telstra's Industry Centre of Excellence, in an interview. "On average, financial institutions now rank analytics fourth in their strategic priorities and are allocating 6 percent of their IT budget for data analytics. This signals that financial institutions now understand the importance of analytics since it was not a strategic priority 18 months ago," he added.
These findings are part of Telstra's 'Analyse This Predict That' study which examines 43 financial institutions across Australia, New Zealand and Asia.
Also revealed in the study: in most financial institutions in the region, the operations and risk management teams are no longer the main drivers of data analytics programmes and investments. Today, such programmes are driven by the marketing and sales departments, said Scopelliti. He went on to explain that analytics is now being used to provide personalised services to the customer. For instance, a customer can opt into a personalised in-branch service that would allow the bank branch staff to receive a notification as soon as he arrives at a branch. The notification will contain information about the customer's recent interactions with the bank and his financial history, allowing the staff to offer a more personalised visit without requiring the customer to explain his purpose of visit.
Besides surveying financial institutions, Telstra also polled more than 3,100 consumers across Australia, Singapore, Malaysia, Indonesia and Hong Kong as part of the study. The majority of respondents to the survey considered offering personalised services and multi touch-points as vital for customer retention. Most of the respondents in Indonesia (97 percent), Singapore (92 percent) and Hong Kong (90 percent) said they intended to remain with their banks if the banks offered personalised in-branch service. Meanwhile, 95 percent of the Malaysian respondents stated they intended to stay with their banks if the banks offered personalised digital banking services.
Financial institutions should thus ensure that they have well-developed analytical information gathering capabilities if they want to leverage analytics for customer retention, which will lead to business growth, said Scopelliti.