As payment options and big data explode, how can this be used to deliver a better customer experience? In this latest FinTech Podcast, John Dunne discusses how one IR customer used this data to offer a differentiated service to delight their customers.
Scott: You notice a run on your credit card. Is it fraud, or is it your spouse? Context means a lot. Here to talk about it is John Dunne, Vice President of Products with Integrated Research. First, John, what is Spouse Alert?
John: So Spouse Alert is a feature that one of our customers brought to market using our products. And, they took the Prognosis realtime information of the transactions that were happening, and they took that realtime stream, and looked at all the transactions and with their customer database, they could see what transactions were on a primary cardholder versus a secondary cardholder. And, what they then offered to their premium customers was a Spouse Alert service. And, they would call their customers up and say, hey, you have a black card and we see that your partner has one as well. Would you like to be advised of when their daily spending reaches a certain threshold? And it was quite funny, because our CEO at the time was banking with one of these organizations. And, we were sitting in a meeting room and suddenly he got a text message on his phone. And his wife was traveling with him and had gone down to the local mall and had put a run on his card. And, it was quite comical for us all to see. But this is just a really good example of how someone has looked beyond the technology and looked beyond the obvious things of let's make a payment transaction happen and let's make sure it's not fraudulent. And they said, how do they deliver a differentiating service to my customers so that they feel they're being treated as a VIP? And this is just one little example of Spouse Alert, and that's what they called it.
Scott: And so as you mentioned, not only are you able to track spending, but really there's a fraud component to this as well. As you are monitoring these transactions, ideally you're able to cut down on fraud.
John: You're exactly right, and there is a growing trend where fraud and customer satisfaction overlap. In that grey zone is where you get customers to participate in fraud. And whether that's being alerted to card not present transactions or transactions over a certain amount, and you can be alerted via text or email or push notification, there's a general layer of intelligence that goes between, I can start by telling you when something's happening. I can evolve to telling you only when it's fraudulent. And then, if I've put that customer's delight hat on, I can tell you something that, it means nothing to the financial institution, but it probably means something to you.
Scott: And so then what, besides the amount, what are some different fields that could be tracked? As you set up personalized alerts, I mean, how customizable can it be?
John: Well, there's a lot of information about every transaction that you have visibility of. And so, besides the amount, there's key fields like for example currency. You might want to know if purchases are being made in currencies that you're not expecting. There's demographics where you know the industry of the person that you're shopping with. So, you might know that it's restaurant versus a supermarket, and you might want to have different alerts about both. You know, let me know when my restaurant bill for the month gets too excessive. There's also information around whether the card is present or not, and that's a pretty important metric for fraud engines, but it's also important for the institutions who have different charge rates as to whether the card is there or not. But as a consumer, if I want to look beyond fraud and say, look, how would I like to know this information? I might be quite comfortable that I'm going to go and spend $200 at a grocer store. I'd like to know if I'm spending, you know, someone is spending more than $100 not at a grocery store, for example.
Scott: So how difficult is it to establish these sorts of alerts, an environment that has these kind of personal alerts?
John: The key to this is having an efficient realtime engine that's able to look at high volumes of data and the rules configured against that. And so, with a product like Prognosis, the realtime analytics and the in-memory correlations, that's very efficient and quite achievable for the largest institutions. Spouse Alert is one example of how an organization looked at how they could differentiate themselves to their customers, and then they leveraged technology to do that. It was a customer delight business led decision. And I think if you look at ways of saying, how do you as a credit card issuer or a debit card issuer, how do you differentiate yourself from your competitors? It's going to be those types of innovations that are going to help.
Scott: Prognosis, proactive performance management solutions. Find out more at IR.com.