Saturday, September 10, 2011

Automated Decisioning and Demand Deposit Accounts: Getting the Whole Package

Demand deposit accounts (DDAs) are evolving. With traditional decisioning software, consumers had wait time involved when opening a demand deposit account--they had to wait to find out if they were approved and if they were they had to wait to start using the account. However, now with new solutions, financial institutions (FIs) can use automated decisioning to open accounts effectively and efficiently and realize profits in the process. Automated decisioning is used to not only analyze consumer data to find out if they are credit-worthy, but is also used to incorporate steps into the decisioning process that enhance the customer experience, builds deeper relationships, and increases profitability for FIs.

Automated decisioning can be used to enhance DDA opening in a variety of ways. Because manual steps are eliminated, the process takes less time and DDAs can be originated at the point of sale. This means that consumers can sign up for an account, the bank can make a decision in realtime, and the consumer can start to use the account immediately if approved. The automated decisioning process can be used in this way to increase customer satisfaction because of the "instant gratification" that it provides.

Automated decisioning can also be used to incorporate a number of steps that would not be possible in manual decisioning processes. Some of these steps include pulling consumer information from a data network, leveraging effective cross-sell, using multichannel integration, calculating attributes, and generating documents.

Pulling information from a data network includes pulling data from both traditional and alternative data sources. This is valuable in decisioning because banks can gain a holistic view of consumers because the data they are collecting is from multiple sources. With manual processing this would be inefficient due to time restraints, but through automated decisioning software, banks can access multiple data vendors quickly. When banks have access to such a large supply of data, their decisioning is more accurate because they have a more complete view of the consumer.

Automated decisioning can also be used to leverage cross-sell. This means that when a consumer is applying to open an account, decisioning software can be used to determine if they qualify for the product for which they are applying as well as additional financial products. When automated decisioning is used, consumers can be "matched" to products they qualify for and are likely to be interested in. When this occurs, they are more likely to accept the offers because they are personalized for them.

Automated decisioning can also use multichannel integration to enhance demand deposit account opening. When channels are integrated, consumers have a consistent experience regardless of how they choose to interact with the bank. When consumers have this consistent experience, cross-sell offers are the same across channels and banks can use data collected from various channels to make better offers. For instance, if a consumer regularly interacts with the bank online, but rarely in the branch, the FI can focus on offering benefits available through the online channel, such as personal financial management or online bill pay.

When automated decisioning is used during demand deposit account opening, banks can realize higher profitability. By combining the components mentioned above, banks will be able to not only originate more accounts, but have happier customers in the process. Accounts can be originated faster, additional steps can be built into the decisioning process, effective cross-sell can be utilized, and channels can be integrated. When all of these are combined, consumers will have fast and effective transactions with their FI. This leads to increased customer satisfaction and wallet share for the institution.

Overall, there are a number of ways that automated decisioning can be used to enhance DDA openings for consumers. When account opening is enhanced, the financial institution can experience higher profitability, wallet share, and positive customer experiences.

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