Market forces such as mergers, globalization, intensifying competition, and new regulatory requirements are radically altering the financial services landscape. Leading financial services firms are prospering during this turbulent time by applying predictive analytics to their most valuable asset—customer data.

Predictive analytics makes it possible to leverage the distinct multi-channel nature of the financial services business—both the wealth of data available and the numerous points of interaction—to gain new insights into customer behavior and preferences. Predictive analytics allow financial organizations to acquire the right customers cost-effectively, grow these relationships through timely and targeted interactions, and minimize risk by detecting and preventing fraudulent activity.

Success in customer acquisition depends on delivering compelling offers to prospects while keeping costs low. Financial services organizations are incorporating predictive analytics into their acquisition processes, enabling them to minimize acquisition costs by predicting which marketing programs will generate the highest responses and value—to avoid investing their limited marketing budgets in the wrong campaigns or at inaccurate targets.

Furthermore, predictive analytics enables financial services organizations to pursue aggressive customer growth strategies through cross-selling and up-selling. By capitalizing on all customer touch points—such as branch offices, contact centers and Web sites—these companies can leverage each customer interaction by determining, in real time, the best offer to make to a particular customer and apply that insight on demand at the customer touch point.

Additionally, both undetected fraudulent activity and unnecessary credit exposure put financial services companies at great financial and legal risk. Predictive analytics enables financial services providers to detect and prevent fraudulent activity, prevent money laundering by detecting suspicious patterns, and determine good and bad credit risks.

The effective application of predictive analytics helps financial services institutions maximize customer lifetime value and minimize risk by transforming data from every channel into important customer insight and recommend the most appropriate action to take at any time.

Download the Vertical Brief here to learn how leading financial services firms are applying predictive analytics to their most valuable asset - customer data.