Marketers in the financial services industry today face a variety of challenges. They need to keep up with new financial services marketing trends but they also need to keep up with the latest economic and marketing technology in order to provide customers with what they want and increase their market share.
The personalization era has been slow to catch up to banks and other financial services firms, but many are now trying to catch up as they understand this marketing notion is not a passing trend. In addition, new technology is emerging to help firms gain customer insights while respecting privacy as data privacy concerns shift. When it comes to offering suggestions to clients, financial services marketers need to consider more nuanced elements in order to provide a more cohesive customer experience. Let’s take a look at a few different approaches to personalization in banking that businesses might use:
What is Personalization in Banking?
A customer’s personal experiences and previous transactions are used to give a valuable service or product to them. In turn, this can boost sales and results by fostering a culture of trust, with an end-to-end experience that connects all branches, applications, and call centers to the same data. When it comes to delivering answers to clients before they even recognize they have an issue, personalization can help.
Is personalization in banking an all-new trend? No, it’s an updated version of the business concepts that attracted customers to banks before mass marketing. Before, customers could walk into a bank and get to know the tellers by name because they were all part of the same community. These days, however, the world is much more dispersed.
What Is the Purpose of Financial Services Personalization?
A shift has occurred in the financial services industry in recent years when the focus is no longer on building connections with bank tellers. Instead, consumers were more worried about who didn’t charge maintenance fees and who had the finest rewards program for their credit cards.
I think this is a massive snub. Financial services have lost some of their individuality in the quest to reduce costs. Today’s customers want their banks to provide meaningful insight and recommendations, but many banks lack the capacity to do so because they don’t know their customers’ goals or priorities.
Personalization in banking can have a wide range of benefits, including increased revenue:
· Increases in the number of people who engage and convert
· Customer loyalty and retention have been increased
· Improved interaction with the client
· Messaging that is consistent across all channels
· Stronger marketing ROI
Think about credit cards as an example. Everyone has a credit card option. Customers with steady incomes, good payment histories, and frequent use of credit cards are sought after by every bank and major retailer. It’s led to a saturated market where banks are forced into ever-tighter margins or take a gamble on customers with low FICO scores.
In addition, new players in the financial services industry are putting pressure on established firms. Amazon’s Amazon Cash and Amazon Lending services, which mimic prepaid debit cards and investment services, are the most formidable newcomers. Since then, Amazon has promised to continue expanding and gaining the market share that traditional financial service providers previously held, and as of 2021, it was lending over $1 billion per year.
Since the financial services industry has become increasingly competitive, financial services companies have begun to compete on the basis of customer experience. Banks can shift their focus away from product obsession and toward a customer-centric focus that increases their brand value by connecting with customers in a personalized and relevant way.
What Banking and Financial Services Companies Can Do to Personalize their Services
Banks and other financial firms can generally use three broad categories of personalization:
Personalization with Prescriptions:
Prescriptive personalisation predicts a customer’s desires and needs based on previous purchases. As a marketer, you may use this strategy to establish rules and workflows that help you better manage your customers.
Personalization in Real Time:
Real-time personalization makes use of both current and previous data to offer customers a more tailored service in real-time. Additionally, marketing teams can use this form of personalized recommendation when users actively purchase on the site. Customer engagement and conversions are both boosted by this.
Personalized Machine Learning:
Intelligent machine-learning algorithms are used for this kind of customization. Teams may use AI-driven automation to make data-driven decisions about how to interact with customers.