How is it that you can ever truly know someone?

That’s the question that various members of the financial sector asked today at a roundtable event hosted by ITWC and sponsored by Equifax Inc.

The relationship between business and customer used to be easy – when someone wanted to open up an account, they walked into a branch. Pen was put to paper and the organizational relationship with the customer came with the warmth offered by a firm shake of the hand and good eye contact. When that’s replaced by the cold transactional endpoint offered by an ATM, or a web portal, can that same relationship still be maintained?

Everyone is trying to balance the mix of traditional channels of communication with the customer with the newer digital options available to them, says Chris Briggs, the chief marketing officer at Equifax. “Whether it’s someone that can answer the phones or someone that’s at the branch, combined with the ability to personalize through digital channels.”

Financial institutions are collecting “cold, impersonal” data about their customers and even prospective customers, said Jim Love, chief content officer at ITWC and host of the roundtable event. But people want to be treated with a personal touch, and in a way that they don’t feel their consent wasn’t considered.

At one credit union with several branches throughout Ontario, business leaders are working on the goal of issuing more personal loans to their members. The opportunity to cross-sell their members on more of their services is a driving reason behind looking at the digital channel as a way to increase their wallet share.

Even with an older demographic, at least 20 per cent of the customer base is accessing the credit union’s digital channels, a marketing manager shared.

“How do we get them onto our platform and off of other people’s platforms?” he asked. “That’s our problem.”

Concerns with consent

But the credit union was concerned about the type of consent it had from its clients and what that allowed it to do to market other products to them. It seemed the more that was done to protect themselves as an institution from a regulatory standpoint, the harder it was to understand from a customer point of view.

Another participant, a director at a Canada-wide online-only bank, pointed out the only way customers could engage with his organization was online. He also worried about using client data in a way that could make them feel their privacy was violated. Aside from the industry regulators, federal or provincial privacy commissioners could become involved if there were enough customer concerns around the actions of a bank.

“They don’t need a direct complaint, they could just have a whim and the next thing you know there’s an investigation on your doorstep,” he said.

Another participant from one of Canada’s “big five” banks noted that Canadian regulations are often more strict than in other regions. Yet the bank chooses to abide by those same strict standards even when operating in a jurisdiction that doesn’t require it, because “you have to operate by the higher order.” Despite the challenge, she sees the benefits of digital channels.

“We love it because we can measure it, we can understand demand,” she says. “It’s the customer that drives digital transformation – they want to do things better and faster.”

Dynamic view of customer reduces risks

Risks in the digital channel go beyond personal privacy, roundtable participants agreed. Digital channels also come with the risk of more fraud attempts from identity thieves that can operate behind the anonymity of a computer screen. Briggs also made mention of online channels being used to set up “sleeper accounts” that sit dormant for a long period, and then are used in a flurry of requests for credit.

To better understand a customer that’s applying for an account from a digital channel, Briggs says the market is moving away from a “static view” of the customer that is determined by a snapshot of their identity when they apply for an account. Instead, a more dynamic view is being adopted, considering behaviour over several years of marketplace activity.

Of course, there are huge privacy implications with doing this. Banks end up having a digital persona that could potentially pattern what a person is doing without attaining permission.

“There’s a balance there and you have to work through what you have consent to do,” he says. “It’s about the ability to take action at those moments in the life journey, to be able to take action but not violate the trust the organization has in its constituents.”

For Love, getting a surprise call from his bank and hearing they’ve done some research on his account is welcome, so long as there’s a clear benefit in it for him.

“They’re calling to tell me I can save money, I like that,” he says. “If you call with a true benefit, that doesn’t get a negative reaction.”

Editor’s note: Aside from the host and the sponsor, ITWC’s roundtable reports maintain anonymity for the other participants in an effort to facilitate a more open discussion. 

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