A growing Utah-based bank is finding new customers and new business opportunities using public records, big data and analytics.
According to an American Banker article, Zions Bank studies its own transactional data and customer records to find underbanked customer sectors. By combing through daily transactions, the combination of analytics and big data help the bank discover usage patterns and trends within its own customer base.
Data scientists then compare these usage patterns and trends against publicly available data from government sources like the U.S. Census Bureau, Bureau of Labor Statistics and Department of Labor. And just what does all of this information show?
A goldmine of opportunity – new markets (including non-bank customers) that could be good opportunities for the small business and consumer banking services that Zions Bank offers within their state.
A quick look at how Zions Bank is using big data and analytics to make marketing and business decisions shows entrepreneurs and startups how to use similar methods to grow their own businesses.
Data Reveals Best Local Areas for Business
Zions uses demographic information to decide which of their branches should offer which services.
After gathering data about factors such as customer education levels, whether customers own homes or rent, and individual or family net worth, analysts reconfigure and plot the data on maps. The maps are then used to target areas for specific products and services based on the demographics of the surrounding neighborhoods. For example, lower-income areas are targeted as being good places to offer check cashing services in the branch, while other branches are chosen for increased small business offerings.
New Target Area or New Product/Service?
Whether you’re running a bricks and mortar business or considering targeting local markets for your digital business, take a look at how Zions tactics could apply to your current customer base. Do the demographics support the services and/or products you offer now? If not, review the demographics of your local market, using publicly available records from municipal, state, or provincial websites or offices. You may find you need to change your target market by location.
Use Big Data and Analytics To ID Customer Segments
According to the article in American Banker, a surprising discovery for Zions Bank was the gap in services provided to Utah’s growing immigrant consumer and business community.
The 2012 census showed that 13.3 percent of the state’s population is Hispanic. At the same time, Utah has a reputation as a state that attracts entrepreneurs.These facts, combined with the entrepreneurial nature of many immigrants, pointed to an opportunity for Zions. Small business banking services for aspiring immigrant entrepreneurs.
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“Our mission was to give Hispanic and Asian communities with the opportunity to have banking services and to have more access to capital on the business side,” says Juancarlos Judd, senior vice president of the Salt Lake City–based bank in the magazine article.
Zions provides a solid example of how to use large amounts of data generated by routine transactions to make better business decisions. A bank is just one kind of business that is well positioned to harness the power of big data – because they have long been required to keep detailed records of each customer and transaction.
What’ s Hiding In Your Big Data?
Think about your own business. What kind of useful information could be hiding in your clients’ routine transaction data? This information could help point your business towards a new or revised product, or a service more suited to the demographics of your client base.
Like Content Quality, Data Quality is King
In today’s automated electronic record keeping environment, gathering data daily results in massive amounts of information. While enterprise businesses often have dedicated data analysts, small and medium-sized businesses increasingly depend on analytics programs to sift through all of this data to find useful patterns and trends. These findings may show areas of both risk and opportunity for businesses.
Zions Bank uses its big data and analytics to discover potential new markets in the form of overlooked customer segments. The bank may also have the opportunity to develop new products based on customer activity and demographics, but will the new markets generate new business? Will the new products meet customer needs?
It all depends on the data quality. Banks have an advantage in this area – they are required by law to update customer records often and collect and keep detailed daily transactions, so it stands to reason their analytics activities will yield useful results.
Keep Better Customer Records
Zions Bank’s lesson for entrepreneurs is simple. Keep good records.
Incomplete or incorrect customer profiles, improperly categorized records, and mislabeled files are just some of the problems that lead to inaccurate results when it comes to big data and analytics.
As the financial sector becomes increasingly competitive, the ability of banking institutions to collect and analyze quality data on current and potential customers is proving an invaluable tool for growth. The same holds true for businesses of all sizes and across all sectors. Those that learn to use analytics with their own big data and publicly available information will be ahead of their competition. And as Zions Bank shows us, there are lessons for businesses big and small when it comes to using big data and analytics to uncover new business opportunities.
Does your business use automated transaction data to find new opportunities? If so, share your best tips in the comments section below.