Community banks are uniquely positioned to find new growth opportunities by partnering with...
Bud
4
min. read
With the introduction of transaction enrichment completely transforming how financial institutions of all sizes operate and engage with their customers, community banks are at a great advantage to not only compete with regional and national banks but also deliver unparalleled and hyper-personalized customer experiences.
The importance of transaction enrichment for community banks
The process of augmenting raw transactional data with crucially important contextual information, transaction enrichment has the ability to empower community banks across America to transform the wealth of data they already hold into actionable, data-driven insights capable of driving growth, ROI and revenue.
But what do we mean by that?
Well transaction data alone isn’t very powerful: it’s typically messy, incomprehensible financial data that doesn’t really have any value. That’s why transaction enrichment is so important; it provides additional contextual information that includes identifiable merchant names and logos, regularity, location and more – ensuring you have the data-driven insights to succeed.
How community banks can benefit from transaction enrichment
In an era where customer expectations are constantly evolving and the technology we have access to is always improving, transaction enrichment has allowed forward-thinking community banks to remain agile, competitive and more importantly, truly customer-centric.
By embracing transaction enrichment, financial institutions like yours can unlock a wealth of valuable insights, streamline operations and capitalize on opportunity as it arises through –
1) Precise customer segmentation and hyper-personalized engagement
With enriched transaction data, community banks can develop granular customer personas and segments based on spending patterns, financial behaviors and lifestyle preferences. By leveraging such detailed insights, community banks benefit from highly targeted marketing campaigns, data informed conversations and more relevant, tailored product offerings — all of which fosters stronger customer relationships, drives customer loyalty and, in turn, maximizes customer value.
For example, a community bank may identify a segment of its customer base are parents who tend to engage with child-friendly vendors. Using these insights, the bank may decide to curate a tailored marketing campaign targeted specifically at those individuals, including services and product offerings like child savings accounts, family-oriented financial planning services or college savings accounts.
Through this targeted and personalized approach, community banks are able to position themselves as institutions who not only support their customers’ financial aspirations but also their morals and value; thereby cultivating a better, more personable relationship capable of driving ROI and lifetime value.
2) Advanced money management solutions for improved financial clarity
Did you know a 2023 Forbes Advisor survey revealed that nearly 70% of respondents either identified as living paycheck to paycheck (40%) or — even more concerning — reported that their income doesn’t even cover their standard expenses (29%)?
That means your customers need you more than ever and what better way to support them than by empowering them to reduce debt, better manage their money and accelerate credit decisioning with holistic, data-driven insights.
Transaction enrichment also enables community banks to develop next-generation money management solutions that evolve as their customers' financial needs do, empowering better savings, deposits and financial outcomes for all.
By analyzing enriched transactional data, banks can even offer more helpful personal finance management features like cashflow forecasting, intelligent autosaving round-ups and personalized budgeting recommendations.
This proactive approach allows customers to truly understand and take control of their finances, positioning you as a trusted and supportive financial partner and cultivating both trust and customer-lifetime value. More financially resilient customers means improved savings and financial health for them but more deposits and money in the bank for you.
3) Data-driven lending decisioning and portfolio management
Because community banks can leverage enriched transaction data to gain a comprehensive understanding of their customer’s financial situation, they also unlock a deeper understanding of their regular cashflow — which is especially helpful during the loan origination process.
Transaction enrichment also has the ability to enable proactive portfolio management through the detection of early warning signs of financial distress, such as slow payments, income reductions or increased expenses — empowering you to proactively identify, mitigate and support vulnerable or struggling customers.
Through detailed analysis and AI-surfaced insights, decision makers are able to better serve the underserved and make more informed lending decisions, allowing you to minimize risk while maximizing profitability.
4) Proactive fraud detection and mitigation for healthier banking
By leveraging enriched transaction data, community banks can better identify unusual spending patterns and potential fraudulent activities more accurately. With this enhanced capability to identify transactions that deviate from typical behavior in real-time, banks can act against fraud more proactively and much quicker.
For example, if a customer’s account suddenly shows a series of high-value purchases far from their usual location, the bank can promptly alert the customer and take proactive and preventative measures to protect them. This advanced level of fraud detection not only helps in mitigating financial losses but also in maintaining the integrity of your customers’ data.
Transaction enrichment also empowers banks to actively reduce disputes and minimize call volumes surrounding transaction disputes by providing full transparency and context around a customer's transaction history. This not only proactively mitigates concern for your customers and positions you as a trusted source of information but also ensures you have all of the information needed to effectively support your customers on their financial journey.
5) Personalized financial advice and targeted product offerings
By thoroughly analyzing spending habits and financial behaviors, community banks can develop a more accurate and comprehensive understanding of each customer’s unique financial situation and therefore deliver more targeted, relevant product offerings.
This deep level of personalization also enables banks to more proactively support customers with personalized advice and recommendations, including but not limited to: budgeting tips, alerts on spending anomalies and auto savings — all of which contribute to better financial habits and outcomes for everyone involved.
These targeted and hyper-personalized interactions work to enhance overall customer satisfaction and loyalty but also position community banks as trusted financial partners dedicated to empowering, supporting and better serving their communities.
Achieving true customer-centricity and growth with transaction enrichment
At Bud, not only do we understand the transformative potential of transaction enrichment but we have witnessed first-hand how this technology has enabled community banks to supercharge their banking efforts, level the playing field and compete toe-to-toe with larger banks while maintaining their local roots and personal touch.
Interested in learning more about how transaction enrichment can supercharge your banking efforts? Register for our upcoming webinar: 'Driving growth in community banks: Improving customer financial health and boosting deposits using transaction data'.
