Amidst all the hype surrounding the digital consumer and the phenomenon that is Generation Y, it is easy to lose sight of who your customers really are.  This is something that banks must beware of.

For while it’s incredibly exciting, Gen Y is not the only segment, perhaps not even the most profitable segment that banks need to serve Today’s banking business needs to serve the older generation, which has the money – and is investing in retirement and insurance products – and the present one, which may be short on finance but is long on financial aspiration. Therefore, the challenge before banks is to serve each of their heterogeneous customers with equal attention.

This is what “segment of one” – or if you prefer, “personalised” – service, is all about. The ultimate goal of “segment of one” is to strengthen customer relationships through superior (which also includes personalised) customer propositions. Which is simply a matter of understanding customers better, creating better products from that understanding, and getting a simple, concise message across, isn’t it?

Not so simple when you consider that banking customers, who are spoilt for choice, have become much more demanding. Or that they’re armed to the teeth with product information. Or that they’ve grown highly individualistic and expect their personal opinion – shared freely over social networks with whoever cares to listen – to count. Or that they’re sending out overt as well tacit signals in their interactions on other banking channels.

With the help of technology, banks can convert this mountain of structured and unstructured information into “segment of one” intelligence and use it to create personalised products and services that delight. They need look no further than Google for inspiration. The search engine, which has begun to track users’ location   as they browse through sites (with their permission of course), uses the information to send them “right here, right now” offers, such as a discount coupon for coffee that pops up on their mobile the moment they enter a café!

In the U.K., Tesco is a shining example of how to leverage customer data to make completely customised offers. You know when you receive a Tesco voucher that it is for something you need. But that’s nothing compared to the way in which this retailing giant mines consumption data to cross-sell. To their supermarket customers who don’t drink alcohol, Tesco – which is also into financial services – offers car insurance at a lower premium!

How many banks can match that?