Money 20/20: Banks can be creepy, as long as they personalise services

Money 20/20: Banks can be creepy, as long as they personalise services

John Thomas, head of enterprise, innovation & strategic business architecture at TD Bank showcases his expertise on how to leverage data to synthesise the customer experience while at the same time, remaining hyper-relevant in the banking sector at Money 20/20 USA in Las Vegas.

Customers want personalised services and they wanted them yesterday. Thomas highlights that there has been no shortage of discussion on this topic and there are a number of approaches banks can take to personalise their offering.

The creepiness factor

Other than the classic business architecture that works forward towards the customer, he explains that others may attempt an omni-channel initiative that is grounded in viewing the customer through the lens of channels. Lastly, financial institutions may take a segmented approach and focus on a demographic.

However, as Thomas says, the traditional demographic is not reflective of how people actually see themselves. “What do people want today? They want to be communicated to with propensity-based interactions.”

Over 50% of attrition is due to a lack of personalisation and this is where the creepiness factor comes in. But how far can banks go? In fact, Thomas reveals that more than 70% say that they have never been spoke to by a company in a way that feels too personal, and this figure is increasing globally.

A generation thing

Focusing on Gen Z customers, Thomas says that this generation has “hyper militant views about authenticity, trust and relevancy in all marketing. 1 in 3 expect companies to know more about them than they do, and technology is also changing in regard to personalisation.

Thomas clarifies that the industry is moving towards a new paradigm of dual data infrastructure and this is driving personalisation with the use of real time insights that feed the next best interaction, the next best result. “Breaking down insights into components and the concept of segmenting portfolios is the next step in this mission,” Thomas says.

He adds that “as a species we have personalisation engines in our heads. It goes beyond comparing your spouse’s personality to your boss’s personality, we must look at the human psyche. Conversion algorithms are very transactional, but we are really looking to build a relationship or a long-term connection. Personalisation strategy should be taking a person out and putting a brain in its place.”

No need for AI

Technology is changing rapidly and is increasingly becoming AI-enabled, but Thomas believes that profound leaps in personalisation can be made with traditional algorithms. He advises banks to get their data layer in order first and beware of multi-year roadmaps.

Customer expectations of personalisation changed years ago, but technology advances in data present great possibilities. Thomas concludes by saying: “think experience and perception because difficult, cost and time to market are all decreasing.”.

Kellie Judge, industry manager, financial services at Facebook, follows with a presentation on how to remove friction and presents findings from commissioned research from Accenture. Judge explores how speed, simplicity and convenience are want customers need and content needs to served in seconds.

Four in 10 leave a mobile site after three seconds and this number has decreased from eight in 2002. “Companies are falling short of customer expectations. On average it takes 22 click to complete a checkout online, so leaving a lot of opportunity for customers to drop out,” she says.

52% of 18-34 year olds surveyed said that they would open a bank account online if the service was more convenient and a staggering 90% would be interested in interacting with banks on a messaging app; this is a key consideration when reducing friction.

67% of checking account users also said that feeling understood by their financial provider is key signifier of trust and 43% would buy from company that offers personalised services.

Friction is too big of a problem to ignore and consumers expect banks to deliver on the power of now, but with the human touch which is why friendly friction must be introduced to maximise customer lifetime value.

Comments from the Money 20/20 community

Personalisation is the new expectation for the customers’ experience. Nicky Koopman, SVP content and value-added services at AEVI, highlights that “what differentiates banks from fintechs is their approach towards collecting and analysing customer data to build pro-active offers for them. This is what the challenger banks are aiming for.

“As ultimately all payments are hitting a customer’s bank account, they have access to a pool of data, from ongoing contracts(energy, insurance, etc) regular buying behaviour that they are analysing to proactively suggest upgrades, contract changes or in general better deals to their customers.

Gil Bolotin, VP of business development in North America for Anagog has a similar view and reiterates the point that expectations are high today. “Most companies today rely primarily on online data (browsing history, purchase patterns, etc.) to support personalisation, but the reality is that human behaviour is far too complex to be summarised by this information alone.

He goes on to state that in order to truly understand customers for who they are, banks need to understand their offline behaviour. “Coupling offline behavior with online data is the key to creating holistic, individual customer profiles and providing the most curated customer experience possible.”

Dondi Black, senior manager, payment strategies at FIS, takes this point further and says that “the key to making that data highly actionable and predictive lies in enriching it with other sources of data that provide a line of sight into the consumer, community and network that a customer is a part of.

“Enriched data allows product and service providers to curate highly personalised and contextual communications and experience. This becomes a critical differentiator between brands, as the more contextual and connected experiences cultivate organic loyalty,” Black explains.

NorthOne’s co-founder and chief operating officer Justin Adler adds that “all too frequently personalisation is viewed as a tool to cross-sell rather than offering features and optimising interfaces that solve customer problems and deepen engagement. To unlock that value, and do so securely, will require banks to un-silo customer data from across their many systems.”

However, security must be considered and Tim Bedard, director of product marketing at OneSpan identifies that “in the age of Know Your Customer (KYC), it is vitally important for banks and financial institutions to verify the identity of its customers and assess their suitability, including potential risks of illegal intentions, to a business relationship with them.

“Combined with the accelerated adoption of digital channels (i.e. online and mobile), new customers expect to be quickly onboarded with as little friction as possible. Once onboarded, a more personal interaction with the bank or FI is imperative to establishing and solidifying a long-term relationship.”

Diane O'Hara, VP solutions principal at Medallia provides a different perspective and states that it is critical for brands to capture and use all the signals that consumers are generating when interacting with banks, “from behavioural and transactional data to social data, as well as from interaction records (such as calls) to direct feedback.

“Because the volume and variety of feedback are so vast, customers expect companies to know and understand their needs and desires. The key is to use this data not only to define and understand what’s happened in the past but more importantly to predict upcoming needs, issues and opportunities.”

Meenaz Sunderji, EVP of partner growth and sales at Zafin adds that “the challenge is banks are not investing on providing relevant personalised experiences. The focus so far on digitisation has been on process automation and how quickly one gets through a process, rather than the relevance of the actual offering to the customer’s needs.”

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