Why Financial Services Need Location Intelligence

Historically low consumer interest rates since the 2008 global financial crisis have contributed significantly to the erosion of financial services profit margins. Additionally, generational and technological shifts have seen in-branch transactions decline and an upswing in digital and mobile self-service.

In this environment, location data is an often overlooked tool that can significantly impact banks’ responses to the challenges outlined above. Enriched with attributes that provide context around competitor presence, for example, average income or home value, and type of customer purchases, location can give rich detail around customer relationships, preferences and interests. A recent Forbes Insights briefing, “The Context of Place: Financial Services and Location Intelligence,” sponsored by Pitney Bowes, focuses on key areas where location can impact customer experience, including channel optimization, site selection, and geo-fencing for targeted marketing.

Although declining traffic and the shift to digital self-service channels has lessened the need for physical branches, the need for brick-and-mortar locations has not disappeared and neither has the expense of operating them. This makes decisions about which locations to close, where to locate new ones and which services to offer in-branch even more critical.

This is where location intelligence and analytics can be brought to bear, furnishing contextual data about the areas where customers work, play and shop to help banks make better decisions, not only about site selection but also about product and service offerings across digital and physical channels, with lower-value activities directed to low-cost channels.

Because location intelligence helps banks better understand the profiles and advantages of one location versus another, it helps clarify where retail locations would best serve their needs.

The use of location data goes beyond simply layering in latitude and longitude to enriching it: By layering in relevant and contextual data attached to a particular area, this helps build a fuller picture of the customers there. That, in turn, can help banks understand how to staff the branch and determine realistic sales and profitability targets.

Banks need to optimize offerings and services across the entire mix of digital and physical touch points they offer. Location intelligence is especially useful in helping institutions understand how to prioritize their services and direct those of lower value to lower-cost channels like digital and mobile. “If you’re in a high net worth area, you obviously would want a personal banker in the store that could talk about wealth investment and pension and 401(k) plans,” says Jim Burnick, managing director of global financial solutions at Pitney Bowes. “Whereas if you’re in a very rural, check-cashing, high-volume area, you may have a kiosk that allows a consumer to walk in and dial into a personal banker, but you wouldn’t have one in a room for them.”

Geofencing refers to the very specific and precise boundaries that can be placed around physical locations, much like an invisible fence, that trigger actions when people carrying mobile devices “break” those fences, on the physical path to purchase. The technology has also evolved to allow reverse geo-coding—where GPS coordinates can be resolved to an address—altitude-based location for high-rise buildings, in-store maps for malls, trace integration mapping and seamless integration with Wi-Fi networks. Because of this, it can be useful in promoting “top of wallet” efforts for credit card providers and in other services.

In the often complex world of mortgage applications, a common problem is the order of events during the mortgage process from qualification through fulfillment. In most cases, the risk management necessary for underwriting and fulfillment happens at the end of the process when physical inspection and proximity risk are assessed. At this stage, physical details about a property’s location can prompt delays. Single View of the Property (SVoP) helps cut down on these by providing richer property detail up front so there are fewer surprises later in the process such as during inspections.

Historically low consumer interest rates since the 2008 global financial crisis have contributed significantly to the erosion of financial services profit margins. Additionally, generational and technological shifts have seen in-branch transactions decline and an upswing in digital and mobile self-service.

In this environment, location data is an often overlooked tool that can significantly impact banks’ responses to the challenges outlined above. Enriched with attributes that provide context around competitor presence, for example, average income or home value, and type of customer purchases, location can give rich detail around customer relationships, preferences and interests. A recent Forbes Insights briefing, “The Context of Place: Financial Services and Location Intelligence,” sponsored by Pitney Bowes, focuses on key areas where location can impact customer experience, including channel optimization, site selection, and geo-fencing for targeted marketing.

Although declining traffic and the shift to digital self-service channels has lessened the need for physical branches, the need for brick-and-mortar locations has not disappeared and neither has the expense of operating them. This makes decisions about which locations to close, where to locate new ones and which services to offer in-branch even more critical.

This is where location intelligence and analytics can be brought to bear, furnishing contextual data about the areas where customers work, play and shop to help banks make better decisions, not only about site selection but also about product and service offerings across digital and physical channels, with lower-value activities directed to low-cost channels.

Because location intelligence helps banks better understand the profiles and advantages of one location versus another, it helps clarify where retail locations would best serve their needs.

The use of location data goes beyond simply layering in latitude and longitude to enriching it: By layering in relevant and contextual data attached to a particular area, this helps build a fuller picture of the customers there. That, in turn, can help banks understand how to staff the branch and determine realistic sales and profitability targets.

Banks need to optimize offerings and services across the entire mix of digital and physical touch points they offer. Location intelligence is especially useful in helping institutions understand how to prioritize their services and direct those of lower value to lower-cost channels like digital and mobile. “If you’re in a high net worth area, you obviously would want a personal banker in the store that could talk about wealth investment and pension and 401(k) plans,” says Jim Burnick, managing director of global financial solutions at Pitney Bowes. “Whereas if you’re in a very rural, check-cashing, high-volume area, you may have a kiosk that allows a consumer to walk in and dial into a personal banker, but you wouldn’t have one in a room for them.”

Geofencing refers to the very specific and precise boundaries that can be placed around physical locations, much like an invisible fence, that trigger actions when people carrying mobile devices “break” those fences, on the physical path to purchase. The technology has also evolved to allow reverse geo-coding—where GPS coordinates can be resolved to an address—altitude-based location for high-rise buildings, in-store maps for malls, trace integration mapping and seamless integration with Wi-Fi networks. Because of this, it can be useful in promoting “top of wallet” efforts for credit card providers and in other services.

In the often complex world of mortgage applications, a common problem is the order of events during the mortgage process from qualification through fulfillment. In most cases, the risk management necessary for underwriting and fulfillment happens at the end of the process when physical inspection and proximity risk are assessed. At this stage, physical details about a property’s location can prompt delays. Single View of the Property (SVoP) helps cut down on these by providing richer property detail up front so there are fewer surprises later in the process such as during inspections.