How Are Banks Using Events to Create Better Experiences?

One thing that banks are not lacking is data. Adding events and event streams into the mix, both the volume and the quality of data will increase exponentially. In today’s data-driven world, banks adopting new core banking solutions with event-based architecture (EBA) will gain a distinct advantage over banks that don’t.

► See also my related blog: Want to understand your customers better? Look at their events

As a quick refresher, events pertain to a change in state or an action taken within a system. A time-ordered sequence of events forms an event stream. Core banking solutions with event-based architecture and event streaming in the technology stack enable banks to deliver digital experiences tailored to customers’ interactions (events) as they occur. This translates into an immediate ability to elevate the Customer Experience and service each individual customer in an impactful way.  

Making events available across the enterprise can be a game changer for the bank. Event streaming brings order to vast volumes of data, and provides the immediate insights that banks need to create the value and experiences customers want. Let’s look at some real-world examples of where event streaming is already in use and proving its worth in terms of the customer experience and customer engagement:

Real-Time Insights

With massive amounts of events being generated by customers, and technology’s ability to analyze and glean insights from the events in real-time, banks can create uniquely relevant and timely experiences in the financial lives of their customers. By responding to situations as they happen, banks establish new ways of engaging with their customers, effectively increasing customer/bank value and nurturing the customers’ relationship with and loyalty to their bank.

Many event-based use cases for enhanced customer experience are in the market, and others are in development. The idea is to delight your customers, using the power of today’s technology to find new and better ways to make customers happy with your bank. It’s working. Consider this example:

Sally, a customer at a neobank, uses her bank card to buy furniture and home goods. Even before the clerk hands Sally her printed receipt, Sally gets a notification on her smartphone and wearable alerting her to each transaction posting. Behind the scenes, the transactions are immediately categorized. Based on the transaction type, the bank’s money management tools instantaneously provide insights into spend type and budget alignment, and provide guidance that empowers Sally to be more aware of her spending habits and make smart decisions about her finances. Sally is in control of her financial health, and feels connected to her bank – even without ever stepping foot into a branch.

This type of increased customer engagement fortifies customer/bank relationships and is clearly a contributing factor in this real-world neobank’s impressive business growth trajectory: Within just a few years’ time, this bank has 2.2 million new account holders.

Opportunities and Options

Events allow banks to create customer engagement opportunities in real-time, and to offer options based on behavior. Consider this scenario:

While paying his bills online, James decides to browse the bank’s credit card offers, which leads him to apply for a credit card. Halfway through the application, he abandons the process. This is a lost opportunity if the bank gets alerted to this abandoned application at a later time. Trying to reengage a customer on a lost opportunity, after the fact, is typically not fruitful.

However, with insights delivered in real-time to the bank, that same scenario could have a much better outcome. With real-time data insights the banking system could inform James of meaningful opportunities or options on the spot. For example, an AI-driven chatbot can suggest a card that is well suited to James’ financial history, or offer to transfer him to speak with a live agent to address any questions or learn more about the bank’s card offerings. The likely win rate goes way up.

Bringing New Life to Data Warehouses

A bank’s existing data stores can be put to excellent use with events and event streaming. All those terabytes of data collected over the years (e.g., data regarding customer spend, mobile interactions, social media, insurance and investments, etc.) can be analyzed, historically, and put into event streams for predictive purposes. This will help shape and model how bank applications and systems should act in the future, with some fertile examples in the areas of customer spend predictions and fraud detection. 

Event-Based Architecture Is the Future of Banking

The future of a financial institution’s success depends a lot on how happy customers are – not just satisfied, happy. Happiness with a bank is mostly determined by the types of experiences customers have – the good, the bad, and the ugly. By adopting core banking solutions with an event-based architecture, banks can move the needle and dramatically improve customer interactions; respond to their customers in meaningful, personal, and opportune ways; innovate with the times; create brand new opportunities to foster business; and ultimately increase the lifetime value – and happiness – of each customer. That’s an equation that adds up to success.