If you’ve logged into your Netflix account and seen movie or television show recommendations based on your previously watched titles, or viewed products purchased together as you check out on Amazon, you’re experiencing personalization at work.
Businesses like Amazon and Netflix have set the bar for personalized experiences. These companies rely on data analytics and artificial intelligence (AI) to tailor their product recommendations, promotions and discounts to the wants and needs of their customer base. As a result, consumers have come to expect this type of service from every company they deal with, regardless of the industry.
Personalization in Financial Services
In banking, a personalized approach harks back to the days of the neighborhood bank branches with tellers and loan officers who knew all their regular customers. In a highly competitive market, banks can no longer support or scale this kind of personalized experience, but neither can they earn loyal customers by operating as faceless business entities.
Banking is no different from any other product or service. Customers have an opportunity to research different institutions, read reviews, and ask friends and family for recommendations. Cost isn’t the only consideration, because customers factor in interest rates, pricing, features, services, and consumer trust. This is where personalization can give a bank an edge.
Digitally savvy younger customers are searching for personalized experiences, such as receiving customized product recommendations and tailored financial guidance. Financial institutions are finding ways to meet those needs, such as mobile banking apps, text messaging and chatbots. These all provide the individual attention and service customers want, and also help increase customer loyalty and wallet share.
In fact, there’s plenty of research that indicates personalization can be lucrative for banks and credit unions. According to this article by Boston Consulting Group, for every $100 billion in assets that a bank has, personalization can fuel revenue growth by as much as $300 million.
Personalized Marketing in Finance
Most financial institutions realize that personalization is important, but putting it into practice can be a heavy lift. Banking customers are looking for personalized services like:
- Real-time guidance regarding financial trends and spending habits
- Recommendations for products that can monitor spending or improve savings
- Control over tailored products and services
- Personalized communications that include specific financial information
- Updates based on status changes, such as credit score
- Pre-approval for financing based on data
To create this tailored approach requires assembling a customer profile that goes beyond age and gender to include variables like investments, income, location, spending habits and more.
Unfortunately, banks usually hold much of this information in disparate databases, many of which are legacy data sources or subject to consumer privacy regulations. Or communications are processed through slow, outdated workflows that don’t deliver the real time engagement consumers expect.
Customer Communications Management
To solve this dilemma, banks, credit unions and other financial services organizations are turning to customer communications management (CCM) solutions. CCM solutions can integrate data across silos to achieve a complete view of a customer. They allow banks to engage with customers on a consistent basis through the channels they prefer, whether that’s a text message or at their local branch. They can use customer transaction data to deliver personalized messages that can help cross sell and up-sell their products. And they can use metrics from all these activities to inform and improve their next efforts.
By delivering personalized marketing, banks can show customers that they come first. DataOceans can help, with a customer communications management solution that improves existing customer relationships and offer tailored experiences. If you’d like to get started, contact us to learn more.