So, You Think You Know Your Customer?
Updated on May 5, 2023
What does it take to know your customer? No, really, beyond the mandatory KYC checks, what does a financial institution really know about its customer?
Let’s say a customer has a salary account in Bank A. All that Bank A knows is that she receives a salary of INR 1 lac every month, and maintains an average balance of INR 10,000 at the end of the month. An analysis of her transactions may show a preference for e-commerce shopping and specific P2P accounts she transacts with – perhaps to pay rent. With this scant data, what would Bank A do?
- Offer a pre-approved credit card with cash-back offers on an e-commerce site.
- While offering the credit card, figure out that she already has a good credit score, and offer a personal loan or increase her credit card limit.
What more can the bank do to recover its cost of opening a salary account for the customer?
Now imagine if Bank A were to offer the customer a Personal Financial Management (PFM) app with Anumati pre-embedded as an Account Aggregator. With a few clicks, the customer is now able to view all her finances – bank accounts, equities, mutual funds, insurance policies, in one place. Of course, this is convenient and gives customers easier control, and promotes financial discipline. What is best is that Bank A might suddenly discover that what they thought was a INR 1 lac a month relationship is in fact much, much more. The customer could have cash flows and assets that make her far more credit worthy. Or perhaps she has a cash-flow problem between the 20th and 25th of the month and might need a short-term bridge loan.
In the words of a very senior retail banker, “I am now able to grow my book by 30% without any new customer onboarding”
Or perhaps you’re a financial adviser or planner who has an army of people chasing your clients to forward their email statements, port that data into MS Excel or similar tool, clean up the data before the real work of analysis and advice begins. If you really knew your customer’s finances with a similar level of granularity and automation, how much better would be your client solutions?
Financial services providers, knee-capped by a lack of authentic primary data, have first created products based on their risk appetites and then tried to find customers that fit that product construct. It’s high time we reversed that process. Armed with granular, authentic, consented data, can you design a product for target segment of one customer?
Anumati powers a range of solutions – either giving you raw data straight from the source, or in partnership with PFM providers to provide you analysed and actionable insights at the click of a few buttons. The good news is that these solutions are real, here & now, and easy to setup and get going with little to no tech effort. Get in touch to know more.
Anumati: Your Data. Your Consent. Your Benefit.