Banks are becoming increasingly aware that personalisation is a significant competitive differentiator and will prove key to winning and retaining customers. The evidence points to the fact that a bank’s ability to deliver a personalised experience is directly related to their brand loyalty. In a survey of 275,000 consumers, customers consistently ranked banks with great personalisation capabilities as best in class.
But what is really meant by personalisation?
Personalisation is about so much more than just greeting customers by name when they open your app. It’s about delivering a service that is unique to them and reflects their priorities through banking innovation. It’s about the way that you build relationships with your customers and become embedded in their lives in the digital age.
Financial empowerment is key to a personalised experience.
Financial empowerment is an important driver to consumers and traditional banks are lagging behind fintechs on delivering true customer-centricity. Customers want to feel secure and be supported to make the right decisions, and they want their bank to be able to recognise their individual circumstances and tailor offers accordingly.
They don’t want to shoehorn themselves into ‘off the shelf’ products that have been designed for demographic segments. They want to be in control and they want to make informed decisions.
Personalisation is problem solving
The key to delivering a valuable personalised experience is about knowing what your customers need right now and finding ways to solve their problems. This often means anticipating their problems before they’re even aware of them themselves. It means working with your customer and shifting your internal focus from products to solutions.
Many leading banks are moving away from a strict demographic-based product focus to trying to understand the ‘life events’ and ‘life stages’ of their customers. Each life stage or event brings with it different financial needs that should be catered for by the bank as they occur. The banks that will be successful in the future will be those that can accurately predict life events and then offer solutions that show they have a deep understanding of the individual customer.
Financial wellbeing as a driver to innovation
Financial wellbeing, or the lack of it, has been proven to have wide ranging impacts on customers’ mental and physical health, productivity and relationships. This is why many of the product innovations in retail banking have been around improving financial wellbeing. Similar innovations in the future will connect lending, payments, and wealth management services.
The banking industry action plan for personalisation
As they are under pressure to grow, banks are being forced to think about how they can differentiate their offering and protect market share from challenger rivals. One popular route to achieve this is personalisation as it has been evidenced to effectively achieve customer loyalty and engagement.
To excel in delivering a meaningful personalised customer experience banks need the ability to translate the wealth of data they hold into personalised digital solutions and real time offers. And they need to equip their teams with the tools they need to shift from a product-centric to a solution-based model.
If you’d like to discuss how to use personalisation effectively in your organisation, get in touch with us, we’d be more than happy to have a chat with you.