Five tips to truly knowing your customer

To truly understand the customer, businesses must connect and embrace all customer data — including big data sources.

Tue Apr 26 13:09:45 EDT 2016

To truly understand the customer, businesses must connect and embrace all data sources about a customer — including those big data sources generated online, in the cloud, through social channels, or with mobile devices.

But in doing so, customer data must be trusted — that means applying data matching and cleansing capabilities to information, both inside and outside an organization. Here are five tips to help enterprises truly understand their customers in context for business success:

1. Identify source data

So you think you know your customer? You have done the analysis and performed the screening and you feel pretty good that you know them. But what if there is suspicious data sitting in your organization, perhaps in a siloed database, or in a different LOB. How would you know? How can you be sure?  How do you really know the address the customer gave you is truly the address they say it is? How do you truly know if this customer has relationships with terrorists or other unsavory people? Do you feel confident that you actually have all the possible data on a customer? Where are the gaps? Are there cultural differences in their name that may reveal something more? Are there misspellings or missing fields or incorrect data entries that skew the data? How do you really know your customer?

2. Validate, normalize and standardize name and address

Well, you can start by cleaning, integrating and standardizing all the party, account and transaction data across the entire enterprise. But how do you do that? Admittedly, on your own this is not an easy task. First of all, you have about six MDM systems, which one is the master? And you have silos of data throughout your enterprise that is housing the truth about your customer, but you can’t actually access it or analyze it. So what do you do? Well normally, on a good day, you take the information you can access and then consolidate the information from the systems you can organize and make an educated guess about the risk of a particular customer. Then you screen at a high level and say ‘yay’ or ‘nay’. But all the while, an aching suspicion keeps you up at night, ‘what if there is more about this customer that I don’t know about?’ What if there is data lurking in the multiple databases that would tell a different story? What if I just approved a customer when in fact they are fraternizing with a terrorist as we speak? It doesn’t help that you have stumbled on this type of data by accident in the past. Leaving a distinctively uneasy feeling every time you investigate an alert. So what if you could ensure that you actually have all of the data? What if you could truly know the real name, the real address and all of the relevant information about the customer, for sure and for real? What difference would that make to your world?

3. Develop holistic view of the customer and resolve all entities into one, holistic customer profile

Well fortunately, there is a way to ensure you know the real name, the real address, the real beneficial owner, all the parties that have everything and anything to do with the customer, in every country, county, city, town, zip code and area code. There is a way to identify and understand all of the obvious and non-obvious relationships associated with a customer, to understand if there is any negative news or sanctions against a customer and to dig deep into transactional data to derive significant insight initially and over time to determine risk.

4. Screen holistic profile for PEP, PEPR, Negative News, Sanctions

So how the heck can you really screen a customer to ensure that they aren’t on any sanction or watch lists? How can you really ensure they are not associated with any indictments or money laundering activities? How can you really know if they are politically exposed or related to someone who is? There is a way to do this and it is not as hard as you think nor does it take that long or cost too much.

5. Assess risk on continual basis based on life cycle changes

What’s more? To truly know your customer is to know them over time.  It is not good enough to understand them during the onboarding process and give them the green light. After that, their situations change. They could join a board, get married, run for office, move, open another business, develop significant relationships oversees, etc. Yearly reviews don’t really do the trick now do they? From initial screening to a yearly review, a lot can happen. Wouldn’t it be great to be able to continuously assess their risk on a daily basis? To monitor and assess behaviors regularly to understand the changes that could impact and change your initial assessment?  And consequently, make the regulators happy in the process? Surprising them when they ask how your yearly review is going and you can say ‘yearly, try daily’. You can do this today.

Learn more about using trusted data and insights in context across your enterprise