“Know Your Customer” is a good axiom when it comes to authentication and security. But knowing your customer is also critical for banks looking to provide the best, most relevant, most personalized service. Market intelligence is the tool for this kind of “know your customer,” but for many small and medium-sized banks the challenge of turning raw customer data into actionable market intelligence has been both pricey and technically prohibitive.
This is where Race Data comes in. The Canadian analytics company specializes in providing community banks and credit unions with powerful data management, database and behavioral analytics, marketing automation, and one-to-one communications solutions. The company’s technology enables marketing teams to improve customer engagement, build loyalty, and grow per customer revenue.
Pictured (left to right): Jeff Deppen (CIO, Orrstown Bank) and RaceData’s Jeff Helm (Director, Account Services) demonstrated the Relationship Accelerator at FinovateSpring 2016 in San Jose.
At FinovateSpring, Race Data demonstrated its Relationship Accelerator. This technology is designed for the smaller customer portfolios and modest budgets of smaller banks and credit unions. The solution combines Race Data’s proprietary data management technology with analytics and lifecycle marketing to give smaller FIs the tools they need to keep current customers and gain new ones.
“If your customer relationships can’t resist $150 (offer to switch banks), then you’re just a commodity stuck in a cycle of incentives,” said Jeff Helm, Race Data’s director of account services, from the Finovate stage this spring. “To break the cycle, you have to do something different: sophisticated analytical methods that transform your data into customer knowledge and focus your resources on high-impact engagements.”
Company facts:
- Founded in 2013
- Headquartered in Hamilton, Ontario, Canada
- Solution is currently in Phase 1 with partner, Orrstown Bank
We spoke with Jeff Helm, director of account services at Race Data, during the networking session on the final day of FinovateSpring in May. We followed up with a few questions by e-mail.
Finovate: What problem does your solution solve?
Jeff Helm: Community banks exist to serve local markets through deep local knowledge and personalized relationships. The banking convenience technologies that their customers want, however, have ended up reducing direct knowledge of customer needs which particularly disadvantages small banks that cannot compete through economies of scale.
Typical customized data-driven marketing solutions that could help focus their limited resources on high-impact customer engagements are not accessible to small banks because their customer bases are too small to achieve analytic reliability; it’s not a traditional bank’s marketing expertise, and the costs to implement and operate them are too expensive. The Relationship Accelerator provides a robust customer-engagement platform that small banks can afford.
Finovate: Who are your primary customers?
Helm: Right now we are looking for a few pioneering banks that recognize the potential for our solution and want to start using and learning with the Phase 1 product. Our best guess is that those will be banks in the $1 billion to $10 billion asset range. As we continue to develop and refine the product, we’ll be able to reduce implementation costs so that it can appeal to smaller banks.
We’re not sure where the cutoff is between choosing the Relationship Accelerator versus a customized solution. It depends somewhat on how much banks are already doing with their customer data: the more a bank is already doing themselves, the less likely they’ll be able to adopt a standardized solution.
Finovate: How does your solution solve the problem better?
Helm: It’s important to understand that there is no plug-and-play solution for this problem. You can’t just go buy software because CRM data management is highly complex and requires specific marketing capabilities to how how to drive. So the advantage of the Relationship Accelerator is that it’s powered by the combination of Race’s data management technologies and marketing expertise.
In particular, by configuring Race’s proprietary data-management hub to support large-volume data processing and complex CRM administration for multiple bank clients, we are able to create the largest dataset that’s needed for analytic reliability. A small bank simply couldn’t achieve this by itself. Then, standardizing the system and logical architectures enables significant cost savings and scale: standardized data structures and transformations make it easy to plug in additional banks, and standardized marketing programs built on the banking customer lifecycle realize cost efficiencies from centralized management.
Finovate: Tell us about your favorite implementation of your solution?
Helm: We have partnered with Orrstown Bank to develop this product for the community banking industry so obviously that would be our favorite implementation. Orrstown people understood that they needed to start using their customer data more effectively and envisioned their solution … work[ing] for other community banks. They sought a fintech partnership because they knew they couldn’t solve the problem on their own. Orrstown has given us the testbed we need to build the platform and start working with bank data and customer interactions.
Finovate: What in your background gave you the confidence to tackle this challenge?
Helm: Race has more than 20 years’ experience implementing and operating custom database and data-driven marketing solutions for some of Canada’s largest companies as well as international clients, so we understand these challenges very well. Some of our data-driven marketing implementations required extraordinarily complex and high-volume processing. Over the past few years we have been building a high-power data-management hub and a library of tactical marketing components to support our service business so we already had a lot of the pieces.
Finovate: What are some upcoming initiatives from your company that we can look forward to over the next few months?
Helm: Our priority—now that the Phase 1 product has been launched—is to bring a few additional clients on board so that we can learn faster about customer interactions and start using that knowledge to begin Phase 2 development.
In Phase 2 we’ll start building the highest-value marketing programs with proactive outbound contact capabilities. At [that] point we’ll start having bigger impact on engagement as the Relationship Accelerator can start driving more timely and relevant interactions.
Finovate: Where do you see Race Data a year or two from now?
Helm: We’ve started with a somewhat conservative business plan that targets steady client growth over the next few years. Ideally we’d like to start building Phase 2 later this year. We’re open to opportunity though; we met companies at Finovate that presented options we hadn’t thought about. Some would instantly create faster growth potential which would force us to invest in critical enablers that aren’t currently in the works.
Either way, once Phase 2 is up and running we’ll look for opportunities to extend the Relationship Accelerator platform to other verticals. Smaller companies in fragmented industries with a lot of customer data could benefit from this kind of data-driven marketing solution.
Check out Race Data’s demo video from FinovateSpring 2016.