Australia’s banking and finance sector has seen some turbulence in the last several years. Although it might outwardly appear that shifts in the competition landscape are disparate and unrelated, they do all have one thing in common: organisations looking to get ahead are going to need excellent data strategies.
Royal Commission and reporting
The 2019 Royal Commission into Financial Services recommended, and achieved, a few large changes across the industry. Most of these changes concern financial institutions prioritising the needs of their customers and creating authentically competitive products, as well adopting a more productive internal culture, addressing misconduct in the industry, and being held to account.
Some changes have been implemented more successfully than others, but one constant is that the reporting obligations for banks have become concomitantly heftier. This means that to avoid throwing massive numbers of resources at the problem, banks have needed to embrace best-practice data management from the top down.
Consumer Data Right and changing customer choice
The Australian Government elected to implement the Consumer Data Right (CDR) in 2018, but it was first provided to customers of the major banks in 2020.
The CDR allows consumers to opt in to sharing their data with accredited third parties, so they can easily compare how different products might work with their personal circumstances and finances. It’s intended to encourage competition and make sure consumers have all the data they need to make an informed choice.
Macroeconomics conditions and the rising cost of living
The competition landscape has lately been complicated significantly by the selective pressure of inflation and cost of living pressures.
This is echoed in a trend across other developed economies, where the movement in macroeconomic conditions is resulting in an emerging consumer consciousness. Some borrowers who may previously have been complacent about getting the best deal on their loans are now demanding value as interest rate hikes begin to bite, but savers building war chests for an uncertain future are equally keen to see their money work harder. A significant minority of these customers are now voting with their feet.
Together, all of that means…
As new economic and legal realities emerge, the data pressures felt by the banking sector are increasing just as consumers are making decisions in new ways.
Savvy financial institutions are most assuredly looking to find out how those decisions are made, by what comparison, and why. Knowing exactly why your customers turn towards you—or away from you—in an evolving landscape of customer choice is the first step to making sure you retain them… or win them from the competition.
To find out more about how to join the dots in your data, contact our team of data experts for a free, no-obligation chat.