Banks have more personal information about individuals than social media companies, but still aren’t using it effectively to provide personalised offers and improve customer service.

That’s according to Dennis Lupambo, Managing Executive, Mint Africa, who says that while users of social networking services can falsify details such as name or date of birth, banks require customers to undertake certification processes to use their services. But from the sign-up point, social media companies maximise value from customer data.

“Social media companies hold onto every little piece of data they get from you and make the most of it. Banks sit with proper data and yet they do nothing with it,” says Lupambo.

He says that banks, especially those in Africa, can now adopt similar personalisation technology that harnesses the power of AI to manage customers and go beyond broad segmentation groupings that have been relied on to this point. This not only improves customer experience but also helps to predict the value of individual customers and better manage and service them.

“AI has allowed us to slice and dice customer bases to an individual level and to be able to personalise something we couldn't do before,” Lupambo says.

This insight into customers is key to generating better revenues, as retail banks needs to increase the depth of more profitable loan products into their customer bases.

“If you're not borrowing from a bank, you're not a high value customer to them; even if your income levels are high.”

The adoption of AI-driven personalisation isn’t just the domain of developed world banks. Lupambo says Mint assisted a bank in Nigeria in 2020, with such a solution. “They wanted to predict products to sell to customers using artificial intelligence. At that stage it was quite new in the banking sector. We created a model, ahead of the models that are available today.”

However, he thinks that such innovative adoption is currently rare on the continent.

“I would say it's an outlier, in the sense that the executives were quite ambitious and had gotten all their initial information from abroad.”

But, he says, across the banking industry there’s a tendency for innovative success to be emulated, and this is further exacerbated by the circulation of personnel moving jobs between the different banks, providing a sort of knowledge transfer.

The failure of banks to unify their data and view of each customer also leads to poor customer experience, he says. “If I have a sizeable home loan car loan and current account with the same bank, but I go into my overdraft slightly, the bank panics because they don’t treat me as one person. They will start phoning me to ask when I’m going to repay it. They don’t put the data together and it feels to the customer like the bank doesn’t know them.

“Banks hold a lot of data on their customers, but without using AI, they couldn't put the picture together, but now they can.”

Dennis Lupambo will be a guest speaker at the Building customer value with D365 webinar, run by ITWeb Africa on March 29. Visit https://itweb.africa/webinar/building-customer-value-with-D365/index.html to hear more about how AI is being used by the financial services industry.