As part of the ongoing dialogue about rebuilding customer confidence in the financial services industry at the SAS Financial Services Executive Summit, bankers, asset managers and insurance executives discussed the challenges and opportunities in using data, analytics and insight to build trust, rapport and loyalty with customers. Here are a few key points from one of our sessions:

Create symmetry of information between customers and institutions.

The point here is that people want something in return for providing information about themselves. Even more importantly, that something had better benefit (not penalize) them. This is much more applicable for firms with high transaction / high touch business models (i.e. banking, credit cards), but insurers can also look to leverage external data sources to better align products and services with customer needs and demands. In fact, life insurers are now looking to incorporate external consumer data as part of their life underwriting process – the benefit to consumers is a possible avoidance of medical exams and the ability to issue a policy quickly.

Treat the customer as a “whole” person.

The financial services industry wants to harness all kinds of internal and external customer data to not only understand but proactively anticipate customer needs. As in our previous example, this can help align products and services within a customer lifecycle. Insurers have not traditionally done a good job at identifying key points in the lifecycle (a stereotypical example could be buying a car, getting married, getting a house, having kids, kids go to college, retirement or estate planning…). At each point, the need for insurance changes, evolves or grows.

Insurers that can create a reciprocal (and mutually beneficial) information sharing environment with their customer will be better positioned to capitalize on this lifecycle (for example, what are your customers willing to tell you? Can you capture that information?).

Incentivize our organizations on positive customer interactions.

I have found that the insurers who incentivize their staff on positive customer interactions are much more successful than organizations that do not. For one large insurer, their customer insights group was compensated on the number of household relationships that they could drive. It’s a great example of cause and effect: the better we create analytics and insight to drive that metric, the more aligned the organization is around it. But it’s only a step: Organizations like Bank of America are revolutionizing their financial model around the customer.

Susan Faulkner, Deposits and Card Executive at Bank of America said in a panel discussion: “In the consumer bank, we shifted to a customer segment view – this may seem strange coming from a product executive, but this was the right way [to manage our business]. In the past, we were incented to sell product, but we changed our focus. Now, we never ask how many products are sold – we ask about customer interactions. We’re changing our general ledger to focus on customer segment profit and loss (P&L) and are moving away from product P&L – we need to keep score the way we run our business; we need to walk the talk.”

Understand the trade-off between data and judgment.

Very often, we look at data and judgment as opposites, but judgment is what you need at every single customer touch point; the data won’t always help there. Let the data drive you to a decision point, and then let the humans drive the next interaction.

A great example is at Nationwide Insurance: When “specialty” personal auto prospects (people who may have had a few accidents or tickets, for example) went online to get a quote for insurance, they would be notified that they would need to speak to a representative. The clunky handoff between Web and phone resulted in a high drop-off rate. When they implemented an online chat service, a representative could reach out to the prospect during the process. This resulted in a higher close rate and increased customer satisfaction.

Use caution when leveraging customer data.

Overusing data can be an abuse of trust. In the words of one banking executive, “We don’t want to be in the “Wikileaks” business.” What that means is that data can’t be collected and used in a way that may leave a person feeling exposed.

At the SAS Global Forum Executive Conference this year, Rom Hendler, SVP and Chief Marketing Officer of Las Vegas Sands noted that in some cases, technology outpaces customer comfort: They have the ability to use software that can identify people on camera (which casinos are full of) and incorporate that into their loyalty program, but are rightly concerned about the potential invasion of privacy.

There are lots of great ideas here for thinking about ways to transform your organization into a customer-focused business. Coming up, I’ll be sharing insight from a panel discussion on customer intelligence from three industry experts across banking, retail and insurance – you’ll be surprised what we found and you can learn!