As data sophistication increases and advertising channels multiply, one question is becoming increasingly relevant in the banking industry: How can banks optimize ad spend across all channels and ensure they aren’t wasting money on marketing that won’t provide returns? In his recent Editor and Publisher blog, Alan Mutter poses the same question. The main solution he identifies is using APT’s Test & Learn to measure the incremental impact of media investments and other marketing activities. Please see an excerpt from the blog below: (more…)
Author Archives: JDouglass
APT CEO Anthony Bruce was recently featured on Bloomberg TV. Click here to watch as Anthony discusses Big Data and why experimentation is the best way to determine whether a new approach or strategy really works.
In a move to make it easier for consumers to switch banks and to increase competition in the banking industry, the Payments Council of the UK has rolled out a “current account switch service” to speed up the process. The service will switch a consumer’s current account to a new bank within 7 days by transferring funds between banks, moving all standing direct debits to the new bank, and automatically redirecting any payments accidentally made from the old account to the new account for 13 months. While participating in the service is not mandated by law, 33 institutions have already enrolled.
Many banks have been using the service as an opportunity to increase their current account market share. This is creating an incentive war among UK banks, both large and small: for example, First Direct is offering £100 to customers who switch from another bank and another £100 if they aren’t satisfied within the first 12 months. Nationwide is offering 5% interest on their FlexDirect account for the first 12 months, and Santander is offering 4 free months of Arranged Overdraft for switching customers. (more…)
APT SVP Will Weidman’s article about the top five retail banking trends for 2014 was recently featured in Banking Strategies. Trends for the new year include more targeted advertising and the bifurcation of the branch. Click here to read more.
In the constant struggle to figure out how to successfully charge fees, some banks are now charging customers for using the branch. A recent article by CNBC cited multiple cases in which banks are introducing accounts for customers who plan to bank mostly through online, mobile, and ATM channels. However, if the customer wishes to bank in the branch, he may face a sizable fee: $8.95/month in the case of Bank of America’s “eBanking” account mentioned in the article.
As we’ve seen with many other banking fee innovations, charging for branch services bears risk. Bank of America recently folded their eBanking account offering after three years, a spokesperson acknowledging that “Customers want full service banking, even if they only visit a teller infrequently.” This action further underscores a trend that we’ve seen before: fees will likely be much less successful if they are tacked onto a product or service that customers are accustomed to receiving for free. In many cases, it may simply be too difficult to get around the customer’s disposition against fees for products/services that were historically free. Alternatively, banks may be more successful in charging fees for new or expedited services, such as fraud monitoring and faster mobile check deposit availability.
So how can banks determine which fees are profitable? Neil Weinberg, editor of American Banker suggested, “What is a premium service that they’re willing to see fees from? That’s the experimentation.” Experimentation is indeed the way APT has helped many banks understand the profitability of new fees. Banks should test new fees in a few markets or branches to measure the impact on key performance metrics and decide whether broader rollout is warranted. Click here to read more about APT’s work analyzing in-market tests at leading financial institutions.
In a recent Wall Street Journal article, Dr. Jordan of Penn State’s Smeal College of Business, discusses the challenges of Big Data for companies. APT’s software suite has been designed to solve many of the challenges outlined in the article, as evidenced by the more than 100 leading organizations that leverage APT daily.
“These are great tools, but who has the skills to use them?”
This article suggests that companies must hire “Big Data experts” to use specialized Big Data tools. APT is designed for use by business analysts. It takes only a few hours of training, and doesn’t require an advanced degree in Computer Science or Statistics. The article gets one aspect absolutely right when it suggests that for Big Data to be useful, analysts must understand the industry. While APT has gained a deep understanding of each of the industries in which it serves, we believe that institutionalizing a Big Data analytics process within the organization and empowering internal users always yields better results than outsourcing analysis to vendors with black box solutions.
“What do we do with all these numbers?”
We agree that standard spreadsheets can’t scale to make sense of Big Data. However, the answer to “what do we do with all these numbers?” is clearer. APT focuses on helping banking executives make decisions that will drive significant bottom line improvements. The outputs of APT are designed to answer three key questions to help make more profitable decisions: 1) Will our new idea work? 2) Will it work better in some situations than others? And, 3) How can we tailor and target a rollout for maximum profitability going forward?
To learn more about how APT continues to solve the Big Data challenge, click here to read a Forbes article written by APT’s Chairman, Jim Manzi. And click here to watch a video of APT’s CEO, Anthony Bruce, discussing testing’s role in Big Data.
A recent NPR article reports that Bank of America recently decreased drive-through teller services in some locations. This reduction in drive-through services is another example of the changing nature of the bank branch. In the article, APT SVP Will Weidman comments on this trend. Click here to read the article.