Personalization in Financial Services: A Necessary Novelty
Personalization in Financial Services: A Necessary Novelty
Kishor Venkatesh R

Content Developer

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Personalization in Financial Services: A Necessary Novelty

19 Feb 2021

In the world of finance, customer experience drives company success. Banks are demonstrating that they understand their customers’ financial needs and interact with them based on their preferences. With improved technologies, financial institutions are trying to meet customer expectations and deliver tailored offers. 

In the past few years, personalization has swept the services industry. Personalization is the one that sets financial institutions apart. It is seen as a competitive advantage and a method to increase customer loyalty and has culminated in customer retention. 

Banks can demonstrate personalization in the following ways: 

  1. Behavioral personalization attempts to determine visitor interest based on their actions, including search phrases, referred websites, visit count, content viewed, and functions performed. 
  2. IP-based personalization can get anonymous visitor information from the IP address and DNS record. 
  3. Personalization via CRM, loan, deposit, and banking applications uses data from applications for various banking products. 

It is about sales only? 

It is not just about sales. It is about providing information, advice, and service, sometimes once or several times a day. On the contrary, many banks are using personalization for sales. Financial institutions offer customers the same products because legacy IT systems cannot measure responses or recommend the next-best actions. 

What can personalization do for customers? 

With their dynamic websites and sophisticated personalization applications, Amazon, Google, and Apple are becoming far advanced than most financial service companies. 

There are still many things finance companies can learn from these global brands. Recent research indicated that people could switch to banking with the companies mentioned above if they could, considering they can trade data for better service. 

As per Boston Consulting Group’s estimate, successful personalization-at-scale could increase a bank’s annual revenue by 10% if they can leverage personalization. Banks can also deliver meaningful and powerful experiences using existing data and everyday touchpoints. 

They can go beyond the next-best offers and create relevant end-to-end experiences. Let us see what financial companies can do with it. 

Mobile/app messaging and advertising 

The number of customers using mobile payment apps is increasing, allowing ease of transactions. It has given rise to the convenience of communication, enabling mobile advertising potential to rise. However, financial institutions have not fully utilized the benefits. 

The growth of mobile advertising is anticipated to increase compared to other marketing channels. Financial institutions can still engage with customers while they continue with their transactions. 

They are making use of interstitial messaging while the customer is logged in to the app. This messaging can include product announcements and general product information while causing minimal interruption, matching products with customer preferences. 

Trusted adviser 

When many types and number of financial options are available, banks can be a trusted advisers. Timely solutions through consistent channels put personalization at the heart of the organization. 

Solutions like ATMs using Artificial Intelligence (AI) and Robo-advisers could fill the need of financial institutions’ search for exciting ways to engage with their customers to build trust and deliver persuasive advice. 

Transactional data 

Financial institutions can access data for analysis and for use in delivering targeted communications for cross-selling. For example, banks can broaden customer’s portfolios from basic accounts like insurance, credit cards, mortgage loans to advice on additional financial products. 

Through data, banks can get insights to recommend products, increasing customer satisfaction, and loyalty. Analytics of behavioral data can help the sales team create segments and profiles to target a particular action. Banks can use the data to tailor messaging and target, resulting in effective and efficient content and offers, propelling customers to take the desired action. 

Customer service 

Customers favor banks that know their preferences and tailor products as per needs. They use websites and apps for payments giving them a sense of control and flexibility over their banking experience. 

The sales team must understand the customers’ channels as part of the broader task of data cleaning and responding favorably to customer needs. They can personalize, automate and measure marketing communications via websites, mobile-optimized sites, and mobile apps. 

On the one hand, we see not all financial firms are willing to offer personalized advice and communications; on the other, we see alternative financial firms like neobanks and FinTech startups investing in AI and ML to provide individualized and unique experiences, differentiating themselves. 

Let us speak revenue 

As per a survey, only 6% are leading the way with best-in-class personalization capabilities. As per Boston Consulting Group, for every USD 100 Bn in assets a bank has, it can achieve up to USD 300 Mn in revenue growth by personalizing customer interactions. 

A personalized approach can construct and deliver services for customers and prospects of financial institutions while communicating and providing relevant information, deepening the relationship between the bank and the customer. It empowers the customer with clarity and visibility into their financial transactions and objectives. 

Draup for Sales is efficient in analyzing data monetization opportunities for financial institutions. The AI-driven sales intelligence platform can help them gain acute insights and devise value propositions for sales engagement. Financial institutions can use our proprietary Signals Cast app insights to explore trending use cases, win customers, and retain existing ones. 

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