Compliance and Customer Experience: Is Big Data the Answer?

CFPB and Know Your Customer regulations demand that banks invest more in transparency and understanding their customers than ever before. This is good news for banks looking to enhance their customer experience, says Dave Hoffman, a partner at PwC’s banking technology and operations group, because customers today want the same things from their bank that the regulators do: transparency and personal understanding.

This need for transparency and knowledge of customer behavior will benefit the banks who “seize the regulatory agenda” and get ahead of compliance, Hoffman insists. And the social media world will require banks to be more transparent as well, since everything can quickly lead to exposure in the social media channel, he adds.

Banks that want good exposure, compliance and better customer experience can reach that goal through big data and analytics. “Complaint management brings together compliance and customer experience… with CFPB regulations, there’s now a reason for customer service people to sit down with the compliance staff and look at customer feedback,” Hoffman says.

The customer service departments at most banks already collect customer feedback through various means, but now banks can combine that feedback with unstructured data in the form of complaints made in social media or transcripts of call center conversations, Hoffman explains.

Ideally, all of this customer complaint data should be collected in one common complaint database that can be accessed by operations, customer service and compliance teams, thereby breaking down organizational and data silos, Hoffman advises. That data can then be categorized into feedback that may be a regulatory concern and complaints that indicate a level of dissatisfaction that customer service teams can address, he adds.

New governance and staffing models can also help banks take advantage of all of their customer feedback data and analyzing it. “Leading banks are bringing together integrated customer complaint teams from customer service and compliance,” Hoffman reports. “This governance model can help drive improvements in compliance and also help refine analysis of feedback for better customer experience.”

Banks are also moving away from using demographic data to understand and predict customer behavior, Hoffman points out. The use of behavioral analytics is still nascent but will grow in the future as banks seek to better understand their customers’ behavior for compliance with Know Your Customer. The insights derived from that behavioral analysis can be applied to customer experience as well, especially as customers are demanding more personalized products and services from their banks. Hoffman recommends including analytics specialists who usually deal with marketing in Know Your Customer projects to gain that customer experience advantage.

[See Related: AML Compliance Makes Know Your Customer More Important Than Ever]

“Banks are already spending on compliance anyway,” Hoffman notes. “If governed collectively, banks could use compliance to their competitive advantage.”

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio