Page 142 - Building Big Data Applications

140 Building Big Data Applications

Outcomesdwill be updated with graphics based on outcomes from algorithms,
with alerts being sent to managers, and administration teams on critical churn
outcomes.
Let us define customer churn and see how we will deliver the application. Definition
of churn is the movement of customer from one bank to another. The reasons for
example be:

Availability of latest technology in the competitor
Customer-friendly bank staff and minimal interference for any service from staff
Low interest rates in loans and credit cards
Location of the physical branch close to home or work
Services offered in mobile with blockchain, presenting so many new ways to
interact with the bank
Churn rate usually lies in the range from 10% up to 30%
Why does churn happen? Customer dissatisfaction is a primary reason and how do
banks invite this behavior from their customers, some reasons include the following:
1. FeesdRaising fees on financial service products is the number one reason why
customers consider leaving in the first place. However, poor service ends up being
the primary reason for actually leaving. Offering lower fees to match online com-
petitors is a difficult initiative for banks looking for short-term growth, but there
are other levers you can pull. Customers appreciate it when they feel taken care of,
and a customer experience impact study found that 86% of consumers are willing
to pay more for a better customer experience.
2. RatesdMuch like fees, the return rates offered by products like money market
funds and savings accounts are highly competitive across finTech startups, new on-
line entrants, and the incumbents. By implementing a long-term strategy to offer
lower fees on entry-level products and better rates on more profitable products
(e.g., mortgage and auto loans), companies can increase the customer lifetime
value and increase loyalty.
3. Branch locationsdSome institutions have adopted an online-only model recently
to save costs, but the majority of customers still like having a physical bank to get
in-person guidance from a valued advisor on investment strategies. A study and
report by Qualtrics found that 73% of online-only customers said they would
switch to a brick-and-mortar bank, while only 40% of brick-and-mortar customers
affirmed they would switch to an online-only alternative.
4. 24/7 customer service and wait timesdNo one wants to be on hold for any
amount of time, especially when there is financial risk involved. If your wait times
are at or above the industry average, consider implementing an online chatbot to
address easy questions and a guaranteed call-back system from a live support rep
for more complex issues. Around the clock live support is expensive, but most