A Moving Concept
Know Your Customer (KYC) is commonly known as the regulations forcing financial institutions to verify customer identities to prevent identity thief, financial fraud and anti-money laundering practices amongst others.
But there is much more to that. At its origin, KYC practices were focused on understanding customers and their financials to help them to manage their risk prudently.
This original concept is now evolving following new marketing trends, we know our customers but we want to know them better, interact with them and infer their behavior to drive our marketing strategy.
Getting to Know our Customers Better
A key point on KYC policies is related to the information we get, its quality and continuous update. Of course we will be able to get mandatory documentation required by KYC regulations, and we will now financial products hold at our institution, but we want to move further.
Additional information helping to define a detailed customer profile and provide a personalized experience can include:
- What they buy, when and which channels
- What they like
- Where they travel
- What are their connections buying, doing
- …
KYC can also go beyond the standard helping improving our customer segmentation and categorization. What if we identify a Platinum customer son and automatically promote him to gold, or set a flag indicating in the system this relationship. Again this knowledge will allow our staff to provide proper attention to other customers whose influence is greater than expected.
The use of Social Media, in addition to open new communication channels with our customers, allows to obtain important information about them. Some tasks can be automated and in other cases it can be obtained directly by Relationship Managers. At the end we will have new source of information helping us to understand more about our customers on:
- Connections: in terms of family members and friends
- Interest: giving us additional hints on products or areas of interests
- Powerful communication channel, providing direct feedback from them
- Publicizing our products: by the use of “like”, publicizing acquired products, etc.
Digest Your Customer Data
At this point we have gathered a big deal of customers data, what next? How can we organize extract relevant data and allow us to really provide an individualized user experience?
Here are some of the important tasks you cannot forget in this process:
- Analyze your data: some relations can be obvious, and important information will be obtained through the use of techniques such as Business Intelligence and specially Big Data techniques.
- Define your customers’ profiles: a complete set of customer profiles, segments, product offerings and specific rules to be applied will be generated.
- Customized promotions: now you can identify the profile for each customer and provide personalized real time marketing offers
- Cross & Up Selling: your cross selling will benefit from this knowledge, you will be able to personalize your offerings according to their specific actions and time
Conclusion
We have seen how KYC has evolved, and is time to take advantage of this evolution combining its initial good banking practices, legal enforcement and accepted use and finally all new gathering data and data analysis techniques to create a personalized customer experience.
Furthermore, combined with new data gathered techniques and knowledge on customer behavior, we will be able to personalize our relation with each single customer, tying up our relation with them.
Interested on predictive analytics? Contact us at Innofis to study your case and see the best way to benefit from it.
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