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Unlocking Actionable Intelligence: Key Takeaways from Forrester Opportunity Snapshot

Unlocking Actionable Intelligence: Key Takeaways from Forrester Opportunity Snapshot

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MX recently commissioned a survey of 150 financial services industry leaders and decision makers in the U.S. and Canada from Forrester Consulting. The study sheds light on how financial providers think about and use consumer-permissioned financial data to gain actionable intelligence and drive outcomes. 

“Consumer financial data programs are vital to continued success, but all too often, organizations are limited by their inability to turn data into actionable intelligence.” —Opportunity And Growth In Financial Services: Turning Data Insights into Actionable Intelligence

The main takeaway? Financial services leaders all agree on the value of data, but the majority of organizations struggle to effectively leverage that data to drive value for both consumers and their businesses. You can read Forrester’s study here. Here are our top takeaways for institutions looking to drive more value and actionable intelligence from consumer financial data. 

Facing Increasingly Fragmented Financial Lives

Consumers today have money in more places than ever before, and as a result, often don’t have a holistic view of their financial lives. This makes it exponentially harder for consumers to effectively monitor and manage their finances. And, it makes it nearly impossible for organizations to truly understand consumer needs. In fact, 41% of data strategy leaders agree it has become increasingly difficult to create a holistic view of their organization’s consumers’ financial lives and understand their needs. 

While there is more data available about consumer finances — 82% of data leaders agree financial services organizations have access to more consumer financial data than ever before, this fragmentation creates what we call “financial blindness.” Consumers struggle to gain a complete picture of their finances, often missing things, and businesses only see a fraction of their customer’s finances. 

Coupled with macroeconomic trends and tightening budgets, financial services organizations face the challenge of turning this growing mountain of consumer-permissioned financial data into actionable intelligence. For instance, 52% of respondents agree their organization has substantial amounts of consumer financial data today that they are not using.

Deriving Financial Data Intelligence

Seventy-nine percent of North American data leaders agree financial data intelligence is critical to their organization’s success in the future. The majority (80%) also agree being able to utilize consumer financial data effectively would be a significant competitive advantage for them. 

When asked about benefits they’d expect to see from a significant improvement to their ability to utilize consumer financial data for business purposes, the majority expect value across the board from an improved customer experience to better decision making to increased efficiency: 

Expected Benefits of Improved Data Utilization

However, according to Forrester’s research, many financial institutions are still at the beginning of their journey to maximize the power of consumer financial data. The study states, “...most financial institutions struggle considerably to utilize financial data today. In part, this stems from an inability — or unwillingness — to evolve their data programs. More than 60% of respondents say their organization largely still uses data the same way they always have. This creates challenges with delivering personalized experiences at scale (60% say this is an issue), wasting data (52% say they have substantial amounts of data they are not using), and using their consumer data to make better products, services, and experiences (38% wrestle with this). Alarmingly, 39% say that the way they use consumer financial data has not been a top priority for their firm.”

The good news is that the majority of organizations recognize they need to change. Seventy-nine percent of respondents agree they think their organization should put a greater priority on maximizing the potential of consumer financial data. 

So, where should organizations focus their energy? When asked to what extent do they feel their organization is falling short of where it needs to be, the top 4 areas where respondents believe they are falling somewhat or significantly short include: 

  • Account Aggregation: 27% said they fall short in their ability to allow consumers to aggregate external financial accounts into their organizations app/site to create a comprehensive view of their finances
  • Data Aggregation: 27% said they fall short in their ability to compile data into a single aggregated and enhanced source
  • Marketing Programs and Customer Intelligence: 27% said they fall short in their ability to use real-time data to make informed marketing decisions
  • Personalization: 26% said they fall short in their ability to leverage data to deliver personalized offers, messages, and services to consumers

Meeting the Demand for Personalization

To drive better outcomes for your customers, you must know them and use those insights to drive value — including more targeted marketing, better service, product enhancements, or greater security. —Opportunity And Growth In Financial Services: Turning Data Insights into Actionable Intelligence

According to MX’s latest survey of 1,000+ U.S. consumers, more than half of U.S. consumers (54%) want financial providers to leverage their financial data to personalize their experience. To add to this, 48% of consumers also say they would give their financial provider access to more of their data if they knew it would result in a better experience. Forrester’s survey found that 85% of decision makers agree consumers today expect greater levels of personalization in banking than ever before. 

But delivering on this expectation is still difficult. Sixty percent of data leaders say their organization is concerned about how to deliver personalized experiences at scale to customers. And, nearly 1 in 4 (23%) say they don’t currently leverage data about their consumers’ financial lives to personalize products and services. 

As it becomes easier for consumers to open new accounts or switch financial providers if they aren’t satisfied, delivering a personalized money experience is more critical than ever. Forrester found that the vast majority (81%) agree being able to personalize experiences based on consumer financial data is a must-have for the future. Amidst fierce competition for share of wallet and mind, financial providers can’t afford to ignore what they know about their consumers. 

Jim Marous, co-publisher of The Financial Brand, says “banks adept at deriving actionable intelligence from customer insights and nimble enough to act quickly can foster much deeper consumer relationships through advanced engagement. The key to seizing these CX [customer experience] possibilities lies in fully utilizing data, analytics and technology to revolutionize how engagement is supported.”

Unlocking Financial Data Intelligence with MX

At MX, we believe being able to effectively connect to, understand, and act on consumer financial data is the key. Financial services organizations who are able to do this will reap the benefits of financial data intelligence. And, those who don’t may face considerable consequences — Forrester’s research found that 44% say they have lost customers due to poor data usage and 45% have lost customers due to poor personalization.

The combined power of MX’s suite of connectivity, data, and experience products drives better outcomes for both businesses and consumers by enabling financial institutions and fintechs to: 

Why MX