In the field of research and data analysis, it is a well-known phenomenon that the outcome of almost any study is usually within the bounds of the investigators’ assumptions and expectations. This researcher bias has affected data collection and analysis since humans began collecting data about their environments, and it affects the data selected, sometimes resulting in less reliable conclusions.
It is human nature to “go with the flow” and sometimes take the path of least resistance, accepting time-honored observations in our fields or societal trends as near absolutes. But, with the mountains of digital data available today about billions of transactions and customer behaviors, it may be possible to see beyond assumptions into new vistas.
I ran into this idea head on while researching a very sizeable sample of more than 600 billion visits to banking websites and apps between January 2015 and March 2016. In addition to the analysis, Adobe Digital Insights surveyed 1,000 US consumers regarding their online financial planning and online-banking behaviors.
One thing I expected to find was the correlation between credit applications and interest rates. A common understanding in the banking industry is that, as interest rates fall, credit demand increases and vice versa. This has been the classic assumption for years.
However, that is NOT what I found. Rather, it was clear from the data that credit appetite in the US is not primarily driven by interest rates. It was pretty clear that there was a strong seasonal component to credit applications with a significant spike during the Christmas holiday season.
Now, the average consumer might say, “Well, of course.” However, the data analyst might say, “Well, that flies in the face of time-honored assumptions.” In fact, I suspect that this trend has been going on for quite some time, but it is only in the last couple of years since we have been gathering the huge amounts of digital analytical data that this trend could be clearly seen.
One approach would be to ignore this and continue with traditional thinking. However, we live in a very new world now where digitally sophisticated consumers with multiple mobile devices expect instantaneous, personalized, and relevant experiences whenever they go online. If they don’t get those experiences, they associate those disappointing outcomes with the brand’s products and services, and they will likely look elsewhere.
Another choice would be to look at this revelation as a powerful marketing opportunity to increase customer service and the value of your service. For example, I noticed that leading up to the holiday season, credit applications increase meanwhile approvals decrease. It makes sense that, as more people apply, there will also be more applicants with less credit worthiness.
What a great opportunity! How about coming up with a marketing campaign for your organization (could be financial, travel, etc.) that offers — during the summer months — credit monitoring or credit-repair services in proactive preparation for customers’ needs a few months down the road? If you are a lending institution, you could take last year’s list of applicants who didn’t receive what they were hoping for and craft a series of service offerings to help them achieve their objectives this year. Campaigns like these would appeal to today’s customer who is always on the lookout for relevant, personalized experiences.
The message I got from this was profound: Don’t be afraid to take risks, push the envelope, and look at data in a new way — especially if it challenges the current assumptions in your industry. And, don’t be discouraged if your organization is not quite ready to take the plunge in the new direction you are suggesting. Awareness is spreading that banks and financial institutions in the United States are behind other countries with regard to adopting mobile technology and building robust, great experiences to meet customer demands. Ultimately, any business that wants to survive will have to undergo a digital transformation — or become the victim of the easy SWIPE a potential customer will make to reach your competitor instead.
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