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A logo of Toronto Dominion Bank (TD) is seen at a branch location in Toronto, March 6, 2014. (AARON HARRIS/REUTERS)
A logo of Toronto Dominion Bank (TD) is seen at a branch location in Toronto, March 6, 2014. (AARON HARRIS/REUTERS)

financial services

TD using analytics to channel the customer relationship Add to ...

Banks are getting serious about cutting expenses as growth slows and consumers move online, but they are still keen to invest in areas that can streamline their operations and improve relationships with customers.

Analytics, they believe, will do both.

“In this slow growth economy, all banks are thoughtful about where they want to invest,” said Theresa McLaughlin, Toronto-Dominion Bank’s new chief marketing officer.

“As customers are interacting with technology differently and have come to expect that the businesses they deal with know more about them and will offer solutions that make their lives easier, it’s clear that banks are placing bets on analytics.”

She said consumer marketing has experienced more change in the past five years than it had in the previous 100, with the popularity of Uber and Airbnb upending the way consumers interact with what are essentially old industries.

Banking is no different. “To be more personal with consumers, we need to know a lot about them,” Ms. McLaughlin said.

Just as important, this knowledge must be shared among different bank channels, whether consumers bank at a branch, at their computer or on a smartphone, so that the consumer experience is integrated into what the banks call an “omni-channel universe.”

The information and data-crunching can create aw-shucks moments, such as ATMs greeting customers with personalized messages on their birthdays, leaving them feeling warm and fuzzy about their bank.

But analytics can do significantly more, from helping customers avoid fees and providing overdraft alerts, to alerting them about nearby branches and delivering special offers tailored to their financial needs.

While enhancing consumer relationships is key, so is the need to make banking more efficient by crunching data faster, reducing fraud rates and cutting the need to gather the same information from consumers over and over again, aggravating them and reducing a bank’s speed.

TD’s analytics modelling activity can now interpret about five years of consumer data in just 15 minutes.

“It’s a revolution,” Ms. McLaughlin said. However, that the emphasis on analytics is creating a war for talent, she pointed out.

As TD’s new chief marketing officer, Ms. McLaughlin is in her second week at what is arguably the most important marketing job on Bay Street.

She took over from Dominic Mercuri, who retired at the end of January after more than 23 years at TD, during which he earned an iconic status, even among big-bank rivals, for elevating the bank’s brand. TD has received the highest overall customer satisfaction score from J.D. Power for 10 consecutive years.

Yet, TD cannot afford to coast on its past awards. Bank rivals are renewing their efforts to place higher in the customer satisfaction rankings. In particular, Canadian Imperial Bank of Commerce said at its recent investor day that it was targeting the No. 1 spot.

At the same time, overall customer satisfaction scores among the banks have been declining, earning them a stinging rebuke from Jim Miller, senior director of the banking practice at J.D. Power.

“When a retail bank increases fees and trims back on its core services to customers for the sake of increasing profits, they may be losing touch with one of the most important aspects of their business survival – the customer,” Mr. Miller said in a statement after the last J.D. Power survey was released in July.

Ms. McLaughlin believes that analytics should help: It will make banks far more responsive to consumer needs, and faster at satisfying them, especially as consumers grow more comfortable with data analysis.

“When a consumer goes into a corner store and buys a pack of gum, that store knows nothing about that consumer,” she said. Banks, on the other hand, know a lot.

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