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Why delivering personalised communications is a must in financial services

Study after study highlights personalisation is what consumers increasingly expect from the brands they engage with. For example, research from Epsilon reveals that 80 per cent of consumers are more likely to do business with a company that offers personalised experiences. With online financial institutions that rises to 89 per cent, and for those banks with a physical high street presence it’s 77 per cent, according to their study.

Furthermore, research by Boston Consulting Group highlights that over the next five years $800 billion in revenue will shift to the top 15 per cent of companies who get personalisation right in financial services, retail and healthcare.

In fact, personalisation is particularly important in the financial services sector, because in the highly commoditised world of banking products it’s the customer experience, driven by personalisation, that really sets financial institutions apart.

Unfortunately, many banks are still stuck in the mindset of delivering generic one size fits all communications on a new product or service. It’s this approach that modern consumers are less attracted to with their individual needs and requirements, and is the reason why a transformation in the thinking process is required if financial institutions are to grow and prosper.

Learn from tech giants

It’s the tech companies such as Amazon, Google and Apple, who are setting the standard in the delivery of personalised communications. They are the experts in using data effectively to deliver personalised customer communications and therefore experiences.

There’s a lot the financial services sector can learn from the personalised approach these behemoths take, who might yet attempt to take advantage of open banking and muscle in on this industry. 

To embrace personalisation banks need to start cleverly using the latest machine learning, artificial intelligence (AI) and cloud technology to turn their customer data into actionable insight and deliver that holy grail of one-to-one personalised communication with customers at the right time – often in real time.

However, prior to embarking on the personalised communications route banks need to have an up to date, clean and enriched customer database. Only then can they undertake effective analysis to make learnings from the data and deliver a single customer view (SCV). It’s this 360-degree picture that will help form the basis of their personalised communications activity and enable banks to become the source of trusted identity their customers use for all of their digital banking activities. This is vital if they want to grow and prosper in the increasingly competitive open banking age and successfully take on the new entrants, be they big or small.

Personalise using transactional data

It’s worth bearing in mind that those in financial services are particularly well placed to deliver standout personalised communications to customers at the appropriate time. This is because they have access to a huge amount of very valuable transactional data on customer spend that they can analyse and use to deliver highly personalised upsell and cross sell communications. For example, if it appears a customer has booked a holiday the bank can communicate travel currency or travel insurance offers at that individual. Also, through such communications, banks can become trusted advisors by alerting customers that they may need a credit or a savings product at the right time.

Personalise customer service

Personalisation also plays a key role in improving customer service, which means banks should put processes in place that identify customers when they get in touch. Such technology should learn, register and make the rest of the organisation’s systems aware, so that wherever and by whatever touchpoint the customer interacts with the bank they get the same level of service and treatment because they are pre-identified.

It’s time those in financial services invest in the appropriate data cleaning, analytics tools and technology that can personalise the customer experience in real-time to drive loyalty, trust and additional revenue from their customers. By doing so they will ensure their continued growth in an increasingly competitive open banking world.

 

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Comments: (3)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 13 March, 2019, 15:02Be the first to give this comment the thumbs up 0 likes

Going by the example I covered in my post Banks Will Know Chipotle Is Going Bankrupt Before Chipotle, the same customers who love targeted offers from the Amazons and the Ubers of the world seem to get offended by them when they come from banks and financial institutions - even when they opt in to them. Ergo, IMO, finserv providers might want to be quite cautious about delivering personalized comms.

Paul Dawson
Paul Dawson - NHS - Uk 13 March, 2019, 15:59Be the first to give this comment the thumbs up 0 likes

Ketharaman's point is worthy of note as personalised comms through finincial institutions should consider the tone of the communications , and indeed be cautious. However, as de-personalisation through digitalisation continues apace, improving the customer experience is a necessity across the industry.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 13 March, 2019, 16:461 like 1 like

@PaulDawson + 1 re. tone. One update I posted to the original post on my company blog relates to a best practice on tone / language viz. obfuscate relevancy. But that was in the context of the retail industry and I'm not very sure if the same guidance will work in finserv.

I also noticed another update that I'd posted re. estimating the value of a personalized comm to the customer. It'd be challenging for an FI to strike the right balance of the various parameters in McKinsey's formula in order to deliver a personalized comm whose value exceeds its creepiness factor.