To identify trends and/or best practices in offering personalization to banking customers - both digitally and face-to-face - to further inform the client's research.
Banks Should Focus on Human Preferences in Digital Personalization
In the financial services sector, digitization of activities have focused on creating “convenient, low-friction transactions,” or making things faster and more convenient for banking customers, rather than being focused on improving the overall customer experience.
Experts at The Financial Brand note that, in order for banks to be successful at personalization efforts, they need to understand why their customers want it – and how they want it. Personalization helps people feel more individualized, unique, and special, while appealing to their power of control in getting something that is intended just for them. Personalization also helps relieve the information overload often felt when all options are presented rather than just those relevant to the user.
Millennials and Gen Zs have brought increased demands for digital banking experiences to banking institutions. Though many in this generation seek increased digital experiences, across all banking consumers, about 25% find personalization “creepy.” An additional 32% believe giving up their privacy is not worth the personalized experience; it is to these individuals that banks need to cater to find the best measure of success.
Since over a third (36%) of banking consumers believe not enough is done to protect their private information, ensuring that any efforts toward personalization assure consumer privacy and protection will be key to success.
The Benefits of Personalization Are Obvious; Banks Will Do More
Due to advances in data utilization and predictive analytics, “more and more financial institutions are seeing the benefits of a personalization strategy.” From the massive amounts of data collected on each customer, banking institutions should now, more than ever, be able to personalize each interaction. However, the Power of Personalization in Banking 2018 report shows that banks are falling somewhat short, despite the technological advances, with only 66% of banking customers stating banks are “doing much/somewhat better” at their personalization efforts.
Notably, 90% of banking consumers find personalization “very/somewhat appealing,” and 80% are more inclined to bank at institutions offering personalization. With these statistics, it’s easy to see why it’s so important for banks to cater to each individual’s needs – when they need it and how they want it.
In 2020 and beyond, banks are expected to increase their personalization efforts – from merely segmenting their data by general demographic segments down further into the psychographic segments of their customers, and further down “to develop individualized communication and experiences for the segment of one. “This is the ultimate level of innovative personalization allowed through data, advanced analytics and digital technologies.”
More Technologies Are Becoming Available to Aid Banks in Personalization
Innovative startups in the financial services sector are showcasing ways to improve digital banking experiences using advanced technologies that focus on the human component (and therefore, make for a better overall personalized experience for each banking customer). One example is Arkansas-based Bond, which offers “a human-centered conversational artificial intelligence (AI) platform that seeks to understand consumers’ financial goals, and help them get their by optimizing spending, savings, and investment.”
Only the project owner can select the next research path.