"Arthur Clarke once observed that cave dwellers froze to death on beds of coal.This is the opening statement of Carla O'Dell and C. Jackson Grayson's book "If Only We Knew What We Know." At the time, their focus was the internal transfer of knowledge, particularly around best practices. However, the quote is just as applicable today when considering the topic of data itself.

In the past, FIs used their core application data for customer segmentation and analysis of product utilization, and subsequently to develop marketing programs. A decade or more ago, many branch systems were designed around these marketing initiatives. The bank representative was coached to promote whatever popped up on the screen while working with a customer. Frankly, many of those promotions, while perhaps offering something of value to the customer, were really focused on the bank's internal desire to sell more of specific products. And it was often a "one size fits all" philosophy.

Today, the challenge is much greater as banks compete more intensely for customers. Customers are expecting their banks to engage them at their "point of life" with relevant offerings and advice. How does an FI offer something that has primary value and relevance to each unique customer – a person now known in the financial industry as "the segment of one"?

According to the FIS 2018 PACE Report, a clue to the answer, particularly when dealing with one of the more targeted segments of the general population – millennials – is that they desire more of an advisory rather than a transactional relationship with their bank. In fact, the same report indicated that more than one third of millennials are frustrated with their banks because they are unable to find the information and advice they need. A bit like the ancient mariner, they find themselves surrounded by a sea of banking options, yet dying of thirst.

Logically, it makes sense to expect this level of assistance from your bank. Financial institutions are, at their core, money management experts. The challenge is applying that expertise to a segment of one. What information might be used to support a customer's needs? And what is the best way to engage?

It happens that the first step is the wealth of information FIs already have about their customers – data regarding who they are, where they live, and, to a large degree, what they do... or at least what they do with their money. The challenge for the bank is how to put that data to work in support of their customer base.

Immediately available, in-house core application data can be used to analyze an existing customer base to better understand how the customer interacts with the bank. Customers can be grouped or segmented into subpopulations of users and analyzed to understand what products they use and what are their most common demands. Using this information, it is possible to project with a degree of certainty what an individual customer is likely to want next.

Is it possible to take it further? The answer is yes. It is even possible to offer products that an FI might not have considered in the past. This is where advances in managing high volumes of data (including "Big Data"), combined with machine learning and integration with personal financial management and other customer experience solutions, comes into play.

In simple terms, when dealing with a customer's point of life, there are two primary categories – anticipated and unanticipated events. Anticipated events include saving for retirement, a down payment on a house, a child's college tuition, or perhaps the next vacation. Unanticipated events might include a cash shortfall due to an emergency or, conversely, a sudden infusion of wealth through unanticipated income or an inheritance. Armed with meaningful data, a customer's bank can help with these situations.

Using advanced analytics and personal financial management, a bank can meet each customer at his or her point of need, providing financial advice and recommending solutions. By enhancing and supporting customers at a personal level, the bank creates "stickiness" – that quality where customers are unlikely to abandon their current bank because of the perceived quality of their relationship.

The value extends still further. Today, banks are concerned with disintermediation – the process where an online bank or other aggregator inserts itself between the bank and the customer. This is an immediate concern in Europe where open banking laws have made it a much simpler and less risky option for customers. The only real alternative is for the bank to become the intermediary – to offer the services customers need while aggregating all their accounts (other bank accounts, insurance, credit cards, investment accounts, and retirement accounts) to provide that 360-degree view of their financial status.

In banking IT circles today, it is common to have discussions about how to monetize data held by the bank. The best way to monetize data is to use it to keep existing customers, become your customer's intermediary, develop a reputation for customer service, and procure more customers. The bank can make this happen by focusing on The Segment of One – delivering ongoing value to each customer's point of life, time after time throughout their banking relationship – leveraging data and technology to focus on the needs of each unique individual segment of one.