The document discusses how analytics is transforming the U.S. retail banking sector, driven by regulatory compliance and customer behavioral shifts, particularly among millennials. Banks are encouraged to adopt sophisticated analytics to enhance decision-making, improve customer loyalty, and better manage risks while addressing challenges related to legacy systems. It highlights the importance of creating a culture of evidence-based decision-making and leveraging unique data for competitive advantage.

1. How Analytics Can Transform the U.S. Retail Banking SectorCognizant Research Center | September2011

2. 1Forces Driving Growth of Analytics in Retail BankingComing of an Era of ComplianceThe financial crisis set in motion a wave of regulations. Complying with these regulations requires banks to create enterprise-wide data architectures to remove data silos.

3. Banks now need to report information that goes beyond historical data. It needs to be risk-based and predictive. New systemic oversight allows regulators to ask for information on an ad hoc basis.

4. Traditional risk management techniques are now giving way to sophisticated analytics that can enhance decision making by predicting a multiplicity of possible business scenarios.2Forces Driving Growth of Analytics in Retail BankingCustomer Behavioral Shifts Banks that weathered the stormy days are now looking to get back to the basics. But they have lost a lot of trust among customers who are now rely more on advice from friends and family.

5. Post the global economic crisis, the U.S. savings rate has trended up, while household debt has decreased. This trend is expected to continue, putting pressure on banks’ margins.

6. Despite the financial strain from the crisis, Generation Y, or millennials, have taken to technologies such as smartphones in a big way. They prefer online banking to in-person branch banking and value good service.Source: TowerGroup

7. 3Forces Driving Growth of Analytics in Retail BankingRise of the MillennialsThe millennial generation is key to banks’ growth in the post-crisis era.

8. This generation has eagerly adopted new technology, especially smartphones, and embraced social networks in big numbers.

9. This generation puts an emphasis on online service capabilities.

10. The growing use of mobile and online banking has led to an explosion in customer-generated data. By applying analytics to this data, banks can reshape their offerings. 4What Banks Should Seek to Achieve Through AnalyticsPredict future scenarios and enhance compliance.

11. Gain insights into what makes them unique and put this insight to use to gain a competitive edge.

12. Drive a customer-centric strategy and improve customer-focused activities.