Tuesday, October 29, 2019 Stamford, CT USA — Powerful new data analytic platforms are shaking up commercial banking by allowing even smaller banks to compete for billions of dollars in revenues from companies unhappy with the service they are getting from their current providers.
Greenwich Associates proprietary attrition risk model identifies at least $5 billion in U.S. commercial banking revenues tied to clients expressing high levels of dissatisfaction with their banks. Fully $2.7 billion of that attrition risk is on the books of the 10 largest U.S. commercial banks.
“This low-hanging fruit is not theoretical,” says Don Raftery, Managing Director at Greenwich Associates. “The new data and analytic tools needed to identify and capture businesses that are unhappy with their current providers are available to any bank.”
Banks today have the ability to focus their sales efforts directly on competitors’ at-risk revenues and other clearly defined targets. The analytic tools that enable this precision can be adopted by banks of all sizes and is leveling the playing field in U.S. commercial banking as never before. However, actually capitalizing on those opportunities is anything but simple.
In a new report, Sales Productivity and the Land of Opportunity—No More Excuses, Greenwich Associates breaks down the steps needed to turn data analytics into a competitive advantage. The report concludes that to succeed, commercial bank management teams must get at least three things right:
- Challenge the Inputs: Banks need to secure access to robust data feeds that include accurate, detailed and reliable external data on the companies in the market and on the competitors who are fighting for share.
- Set the Strategy: Banks must allow insights from the data to determine priorities and to help define specific, quantitative goals and timelines that can be adjusted in real time as the data change.
- Communicate, Communicate and Communicate: Banks must communicate with, and win buy-in from, the relationship managers (RMs) that will execute the new, data-enhanced strategy on a day-to-day basis. Data analytics can dramatically enhance the effectiveness of individual RMs and overall organizational sales productivity—as long as the RMs understand and embrace the strategy.
“The increasing power of data analytics to improve sales productivity is driving the industry toward an inflection point,” says Jen Paterson, VP of Business Development for Greenwich Associates and author of the new report. “Banks that fail to make the necessary investments in these tools now risk quickly falling behind—and missing out on unprecedented opportunities for growth.”