Put simply, the onus is on customer insight and analytics teams to demonstrate how their activities translate into business value. This has traditionally been problematic for a variety of reasons. KPMG research has shown that even the most advanced customer analytics teams are still at a relatively embryonic stage of implementing formalized KPIs and performance measures that would demonstrate the value of their work. At the other end of the scale, several institutions simply do not see the point in measuring the value that analytics can add; as one interviewee put it, “the business is doing well so we aren’t being asked to measure the value we are delivering.” Such short-termism may prove to be injudicious should market conditions change unexpectedly.
Customer insight and analytics is therefore often dismissed as only a moderate strategic priority, which in turn means that they struggle to present a compelling business case at executive level. In order to break this vicious cycle, customer insight and analytics teams must become more vocal and adept at demonstrating their value in achieving the bank’s business objectives and delivering the overall business strategy. This will entail that customer insight and analytics functions begin to gain both the confidence and subsequent buy-in of the business.
A key strategy to reaching this goal will be the drive towards a more defined scope and clearer objectives by using strategy mapping techniques. This, in turn, can be converted into Key Performance Indicators (KPIs) that can be refined into individual goals. Without robust measurement and KPIs, customer insight and analytics will never be able to muster a strong business case for investment that garners support across the organisation.
The path to a more effective customer analytics function is clear – whether teams choose to take it remains to be seen.
Michael Betts, Analyst, Management Consulting, KPMG in the UK