Who are they?
Barclays Information Business was established in 2013 to champion a practical approach to guidance on privacy and customer data usage. It supports data-driven processes and decision-making across the bank ensuring that governance is applied and innovative new processes are enabled.
What do they do?
Under the Financial Conduct Authority, banks are required to consider the financial vulnerability of customers, from their existing levels of debt to the impact which a future interest rate increase might have on a new mortgage applicant. FCA research in 2017 found that 50% of all UK adults, 25.6 million people, display one or more characteristics that signal their potential vulnerablity, with just under 8 million considered to be over-indebted (source: FCA Financial Lives survey). The analytics team within Barclays Information Business, working with colleagues across the bank, has developed a new approach to the issue of financial vulnerability which moves away from a narrow, product-specific view to an holistic, customer-centric approach for both consumer and business customers. Typically, the bank had focused on customers who had already entered the collections process or were near to doing so. Analytics has been applied to identify different degrees of vulnerability across the customer base, gaining insight into how they behave and interact with Barclays. This involved looking across current accounts, personal loans, mortgages, credit cards and the credit risk department. Data covering 13 million customers was analysed and over 20 behavioural triggers identified to build the vulnerability models. These included levels of disposable income, over-spending, difficulties with overdrafts, transferring savings into current accounts, payday loans and any changes in government benefits. Using these models, a proactive contact strategy has been developed, using test-and-learn metrics, which involves tailored money management tips and advice from Barclays internal finance coach, as well as other outbound channels. The segmentation determines which messages individuals receive, offering money management support or independent financial advice where necessary. Given the sensitive nature of customer vulnerability, messages are being constantly evaluated and developed. Across a six-month period, Barclays was able to track a 85% fall in telephone calls, 65% reduction in branch visits and 35% fewer compaints relating to financial health. It is now looking at how to expand the view used of customers’ financial health by incorporating third-party and open data where possible.
What did the judges say?
The judges recognised this initiative as a clear “win-win” for the bank and its customers. With consumer and business financial health still relatively fragile since the ccrash of 2008, early intervention and proactive management will play a key role in helping all sides to avoid future problems. There was particular applause for the way this data-driven process has built a positive platform for future initiatives and techniques.
