The modern banking and credit industry relies heavily on customer data analysis. Customer profiling is critical when banks want to perfect their CX strategy. As centralized banking solutions proliferate, customer data analysis, and its extension customer profiling, will help bankers get their product promotion right, optimally utilize self-service channels, and reduce branch visits for everyday transactions.
Banking CRM systems need continual updates from moving homes to changing marital status or job changes. After all, these alterations influence multiple decisions – from promotion activities, newer risk assessment, revising interest rates, or resetting credit limits. Recent research says 97% of US companies make avoidable errors associated with the customer profile.
In 2022, customer profiling will be essential to CX.
The customer of 2022 is used to digital-first. The dependencies banks will have on customer profiling – whether speed (‘want-it-now’ culture), seamless omnichannel experiences, messaging, and mobile-first conversations, or even experiences that will move from automation to prediction- will only grow.
Along with delighting customers anytime, anywhere, a key imperative for banks today is the ‘screening’ services. From mitigating financial crime (fraud, terror financing, money laundering) to amping up due diligence by accurately matching profiles against sanctioned lists, banking CRMs play a critical role.
Size of financial crime.
A recent Global Banking Fraud survey interviewed executives across 43 retail banks, with eighteen having annual revenues over $10Bn and 31 employing more than 10,000 people across the globe. The outcomes were disturbing.
- More than 50% of respondents recover less than a quarter of fraud losses.
- 1 in 2 respondents globally experienced an increase in fraud value.
- Over 60% of respondents experienced an increase in fraud volume.
There are other indicators. Between record-breaking fines from regulators ($40B in 2016) and the adoption of open banking (banks share data and systems with third-party service providers), banks must now contend with an additional layer of complexity and vulnerability. Not to mention cost as anti-financial crime efforts can cost banks up to 1.8% of their total assets.
Temenos Banking – core components of combating financial crime.
Temenos core banking solutions mitigate financial crime through four primary ways:
- Suspicious activity prevention: Real-time transaction monitoring that detects, and before funds are moved, stops suspicious transactions of abnormal frequency, suspect locations with ‘not-seen-before’ partners.
- Profile: Web-enabled, end-to-end customer profiling as part of anti-money laundering solution. The ‘Profile’ module creates alerts when current customer behavior supports money laundering and differs from previous or reference patterns.
- Know customer plus: A risk-based solution that classifies customers according to their risk profile at the account opening time and across the entire customer lifecycle. More advanced than KYC, the module uses a detailed risk matrix dashboard that incorporates risk status, range, and count, that ensures customer profile awareness.
- Screen: This versatile module offers business protection by screening customers and transactions against watchlists and sanctions. Screen integrates lists across origins – public, commercial, private, by applying geographic and business rules. Next, sophisticated algorithms and next-generation scanning methods deliver the lowest rate of ‘false-positive’ alerts without diluting detection rates.
Critical features of Temenos Screen that help in customer profiling
Lowest false positives
Compared to traditional sanction screening technologies, Screen is highly automated. Overall operational efficiency is enhanced along with the reduced cost of screening transactions. Through automation and accurate profiling, Screen has high straight-through processing. Not only does it discover internal misbehavior like stripping relevant information out of transactions, but it also detects politically exposed persons within customer databases, which may have slipped through manual ‘Know-Your-Customer’ checks.
Proven rules and algorithms
Temenos Screen works on a unique financial fingerprinting technique (DNA assigned to a customer). It brings clarity and control, accuracy, agility, efficiency, and reduced risk. With complete operational and technical management, Temenos Screen flags both usual and unusual behaviors through pre-built typologies and AI-enabled self-learning algorithms.
Temenos solutions routinely process more than 2Mn transactions per hour with 100% system availability with highly configurable business rules and vertical & horizontal scalability. For corporates invested in continual risk assessment, the modules offer holistic coverage – watchlist screening, KYC, anti-money laundering, and fraud.
Stakes will grow only higher.
United Nations estimates $1.6 trillion is laundered globally through banks each year. As compliance costs rise (increase by 50% by 2027), the fines to non-compliant banks will exceed $320 billion. While only 1% of money laundering flows are intercepted, 99 percent of illicit financial flows go undetected. The result? Trust in banks drops, and regulators bring additional focus on their operations.