With the world in the midst of a very turbulent market, Quantexa has offered advice as to how companies can achieve growth and manage risk during this time. The secret is using all available information and data to anticipate and respond to new risks and emerging opportunities.
It stated that the best way to stay ahead of the market is by leveraging trustworthy and timely information on customers, their internal operations and their external environment. By leveraging this, they can extract insights and disseminate them across the business to better shape decisions.
However, Quantexa warned that most of the current data used by firms is not being collected or analysed quick enough.
It pointed out four major hurdles that are preventing many firms from making the most of their data.
The first of these stumbling blocks is the concept of an organisational silo. It stated that many companies operate in a siloed environment, with separate departments managing different parts of the customer journey.
A knock-on effect of this is that each division makes their own set of decisions and this can even lead to different datasets being created for the same customer. For example, a KYC team might analyse one dataset when examining risk, marketing teams might then use another one when launching an outreach programme, and then the sales team could use a third dataset when going into a client meeting.
“This results in inconsistent decision-making, higher costs, and fragmented customer experiences.”
Data quality problems
The next issue highlighted by Quantexa was with the lack of high-quality data. It stated that dynamic decisions are built on trusted data. Trying to derive insights and make decisions based on inaccurate data only brings risk. Additionally, an inability to combine internal and external data sources mean organisations often lack a 360-degree view of their customers, vendors and business networks.
Legacy technology and culture
It is no secret that many organisations are held back by their legacy systems. If firms want to stay ahead in the market, they need dynamic decision-making, which old systems cannot cope with.
The final major hurdle is the culture and business processes. Quantexa explained that many firms are still held back by the mindset of ad-hoc and periodic analysis. Rather than waiting for the annual review, teams should be looking to be “always on” and on the lookout for any relevant market changes or a divergence in client circumstances.
5 ways to improve insights
Having outlined the current barriers, Quantexa offered how firms can overcome these.
Combine internal and external data sources
Quantexa stated that organisations should look to combine their internal and external data so they can have a holistic view of their customers. This needs to include high-frequency data feeds that supply timely insights into customer circumstances, such as payments, digital interactions and news data.
It offered a couple of advanced techniques that can help. One of these is entity resolution, which can provide a step change in capability over traditional matching technologies, by allowing more data to be connected, giving that 360-degree view.
Another option is graph capabilities. These give firms the ability to monitor additional context, such as understanding family and social groups, corporate hierarchies, and supply chains.
Real-time architecture & embedded analytical models
Its next tip is to invest into real-time architecture. This will allow companies to move away from their legacy systems to a simpler and more cost-efficient IT estate, leading to improved operations and reduced costs.
Quantexa’s third tip was to seek embedded analytical models to help them drive relevant and timely customer engagement. It stated this could involve deploying risk-based models to support perpetual KYC, triggering reviews based on changes in a customer’s profile or network.
It could also see the firm deploy models to highlight opportunities for relationship managers, such as recommending financing options to commercial clients based on changes in their supply chains.
“These models can also drive direct engagement with customers: e.g. personalising a customer’s online experience to show them relevant products and services, or routing customers to particular service channels based on predicted lifetime value.”
Integrate with existing end user and customer-facing systems
The fourth piece of advice was to integrate outputs within existing systems. It stated that this might mean pushing outputs of KYC risk models into an existing case management or workflow tool, or integrating the outputs of product propensity models into CRM systems, marketing automation or digital experience platforms.
Additionally, it urged companies to adopt platforms that have flexible APIs to support interconnectivity and allow information to quickly be distributed across the system.
Ensure tight controls around data use
Its final piece of advice was to ensure tight controls around data. Quantexa explained that when driving decisions across multiple domains, there is a need for controls around data processing.
For example, the use of certain data attributes from a credit bureau may be permissible to use for credit risk and fraud, but not sales and marketing.
Read the full report here.
Copyright © 2022 FinTech Global