How banks can help customers avoid economic hardship

Weathering economic uncertainty is a major concern for banks. As interest rates rise, it’s unclear whether the economy is headed for a recession or is already in one, or whether the Federal Reserve can engineer a soft landing.

Regardless, banks can’t afford to close their eyes. At moments like this, data is an institution’s best friend. Banks need timely and insightful data at their fingertips to gain a better understanding of their customers, allowing them to proactively address problems before they escalate.

For instance, banks can uncover anomalies like spikes in business credit usage and pair that with an increase in past dues to identify customers who could benefit from a phone call from their commercial relationship manager. That type of proactive outreach could have a positive impact on both the client’s and the bank’s bottom line and supports true relationship-building with customers.

Timely insights also allow banks to understand their risk exposure. Even if banks are reviewing portfolios quarterly, they’ll be behind. With insights available daily, banks can monitor their health more frequently and make changes quickly.

How banks can gain business intelligence that matters

It is incredibly hard for banks to harness data and put it to work in a way that produces insights. It’s not a lack of data they face. It’s corralling all the data stuck in siloed systems and turning it into actionable insights.

Banks’ legacy systems are built for processing a large number of transactions, not providing data intelligence. Teams either attempt to fit a square peg into a round hole by using the core processor’s solutions or they’re left trying to solve complex matters on their own. Identifying the data that is truly impactful, making those insights accessible across the enterprise, having consistency in reporting and doing so in a timely way where proactive decisions can be made is no small feat.

The big-ticket question becomes—how?

Banks can take their business intelligence to the next level by aggregating data from their core and various ancillary systems. Teams can then see that data more clearly to make better decisions and minimize economic blows.

However, banks are forced to manually collect and analyze data themselves, which can result in inaccurate or incomplete intelligence. They also don’t have the time or resources to review data as often as they need.

Banks need real-time data and must look to technology and AI for greater efficiency and accuracy. This is especially true to scale as the volume of data grows. With the time saved on collecting and analyzing data, banks can put their insights toward building a better organization.

Using data for data storytelling

Data alone doesn’t change behavior and lead to action; emotions do. That’s where data storytelling comes in—the practice of building a narrative around a set of data and supporting visualizations to help convey it in a powerful and compelling way. It’s the difference between reading numbers on a spreadsheet and bringing that data to life.

The human brain prefers stories over numbers. We consume massive amounts of data, processing as much as 74 GB each day—the equivalent of 16 movies. To prevent information overload, the brain filters what’s important to remember and what can be discarded.

Compelling visual representations also play a significant role. Think charts, graphs, diagrams or infographics to engage the audience and turn data into something digestible. Now take that compelling visual a step further—enter intuitive, interactive data dashboards. Banks now have the holy grail to build a compelling narrative and communicate insights gleaned from their data, providing context and meaning to inspire recommended actions.

Consider the earlier example of a bank that uncovers spikes in business credit usage. Rather than showing a spreadsheet of numbers, a compelling narrative paints the picture of Jane, the owner of a bakery who took out a small business loan last year.

Today, Jane is worried about the economy. Inflation is soaring and she’s struggling to keep up. Rather than waiting for her to call the bank or for her to become delinquent, a relationship manager proactively calls her.

As it turns out, Jane needs a line of credit to relieve her from temporary egg price increases. Jane is also stressed about affording her student loan payment on top of other bills, which resumed in September. The bank reviews flexible repayment plans for her business loan, lessening her monthly payment obligation and keeping her in good standing. Not only did the bank help her avoid serious financial troubles, but they’ve now built a relationship with her.

Jane’s story is just one of the many ways banks can leverage data to help customers before issues escalate. With timely and insightful data, banks can better identify early warning indicators and determine situationally appropriate intervention, helping both their customers and the bank itself weather the storm.

Kim Snyder is founder and CEO of KlariVis, a cloud-based, universal enterprise dashboard and analytics solution built for bankers, by bankers.