Published on the 13/06/2013 | Written by Newsdesk
Technology is disrupting the traditional structures of the financial services sector – but it is also providing Australia’s banks with their greatest ally in terms of crafting a survival strategy…
The Commonwealth Bank has unveiled a makeover for its online presence and foreshadowed a private social network which will allow its customers to share banking information and glean financial insights. Rather unimaginatively dubbed the Support Community, the social network will be accessible from PCs, smartphones and via the bank’s Facebook page, and bring together customers and bankers when it goes live next month.
According to Drew Unsworth, the bank’s general manager of online banking, the service will provide users with a much more personal experience of banking. What’s left unsaid is the value in all that data that Commonwealth Bank will be able to mine for a much richer understanding of what its customers are looking for.
It’s not the first bank to embrace social media and big data to connect and engage with customers. Last December NAB set up a Social Media Command Centre which examines what is trending on social networks and also helps identify potential troublespots for the bank. NAB’s online-only bank, UBank, is also very active in social networks and has constructed an online capability called People Like U which meshes census data with anonymised transaction data which can then be browsed by bank customers to identify “people like you” and compare individual’s spending patterns with those of a similar cohort.
The ANZ meanwhile has signed up to use IBM’s Watson, which will mine bank data in order to make highly targeted recommendations to customers.
While it’s unlikely that anyone will shift banks because of their social network or big data prowess – or even because of a funky new smartphone app or website – the traditional banks are all clearly hoping that this constant innovation and engagement with existing customers will make them more “sticky” and less prone to churn.
And the banks aren’t just worried about customers moving to one of their traditional rivals, but turning to other emerging financial service and payments providers; to peer to peer payments systems such as the Sydney-based Pygg; even to virtual currencies such as Bitcoin.
Earlier this month ANZ chief information officer Ann Weatherston reportedly told delegates at the FST financial services conference in Melbourne that after a recent field trip to Silicon Valley the bank’s chief executive, Mike Smith had described as “terrifying” the sorts of advances which were now emerging which could have disruptive impacts on banking.
It’s prompting continued massive investment from the sector. IDC has already forecast that Australian banks and insurance companies will spend a combined A$10 billion on technology this year.
