Customer Analytics Adoption in Banking: When Management Doesn’t Lead

by Bob Meara, September 3, 2014
Industry Trends
North America

Abstract

The underdeveloped usage of customer analytics in banking is a result of two factors: the immature state of data analytics at most banks and a lack of leadership at the top. Most banks don’t have data-driven cultures and don’t seem to care.

Data analytics is a complex subject and a complex undertaking. In the report Customer Analytics Adoption in Banking: When Management Doesn’t Lead, Celent examines the growing role of customer analytics (predictive analytics applied to customer data) in banking and why it is increasingly important. Despite this, two-thirds of surveyed North American banks are still exploring or experimenting with customer analytics.

This report begins by examining surveyed strategic imperatives and the technologies perceived as most important to their achievement. The report then looks at the immature state of data analytics and its causes, while examining the stated and likely future adoption of a variety of applications involving customer analytics. 

Over the next five years, as customer engagement becomes increasingly digital, pervasive use of customer analytics will no longer be optional. This will advance customer analytics from a project undertaken by a minority of banks to a core competency among the majority of financial institutions. But many banks are being left behind.

“Despite growing adoption of a variety of customer analytics applications, most banks don’t have data-driven cultures and don’t seem to care,” says Bob Meara, Senior Analyst with Celent’s Banking Group and author of the report. “As long as senior management at most banks continue to trust their judgment more than data, fully leveraging customer analytics won’t be a high priority.”

This report concludes with recommendations for banks aspiring to create a more analytic, data-driven culture.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Introduction: The Ascendancy of Analytics

4

The Immature State of Data Analytics

9

 

Is Your Organization Data-Driven?

10

 

Who’s Leading the Charge?

13

Where the Analytics Action Is

16

 

Customer Analytics Adoption Detail

18

Recommendations

23

Appendix I: Survey Methodology

24

Appendix II: Technology Adoption Detail

26

Leveraging Celent’s Expertise

31

 

Support for Financial Institutions

31

 

Support for Vendors

31

Related Celent Research

32

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