By Preetha Pulusani
Personalization involves the communication of relevant, tailored messages to banking consumers based on their individual preferences, needs and behaviors at a particular point in time. In today’s new, hybrid world, financial institutions seeking to strengthen account holder relationships will find that doing so means effectively using a deliberate blend of personal and digital touchpoints to deliver these communications.
This is where data-driven personalization shines. It is a strong enabler for banks to engage account holders while enhancing their satisfaction, loyalty, retention and profitability. Personalization can be a powerful tool . To be most effective in engaging a bank’s audience requires a delicate balance of art and science, combining human insights and creativity with data and technology.
Not too long ago, cross-selling products and services was based on personal relationships and largely a manual process that did not scale well. Bankers might identify one of their customers to be looking for a new home and be ready to offer a mortgage product. This relies on their personal knowledge of such instances that can be something that is hard to scale and resource.
Another tactic is to employ the blanket approach where a financial institution might blast out a direct mail or email to every account holder pushing home equity lines of credit). This tactic, with minimal personalization or thought given to individuals who comprise the audience, including those who do not even own homes, can result in poor conversion rates in addition to vividly demonstrating how little the financial institution actually cares about its individual consumers.
The art of personalization: Understanding account holders
Personalization begins with understanding account holders as individuals, rather than merely as segments or averages. Knowing who they are, what they want and what they need financially must culminate in actions to help meet those needs. Empathy of their pain points, aspirations and emotions must translate into meaningful communications.
With the digitization of the financial services landscape, personal touchpoints need to be supplemented and complemented with personalized digital touchpoints. These can indeed scale very well and ultimately be well automated while achieving the personal and human touch. Accomplishing this objective requires the appropriate use of account holder information (which banks already have) to personalize these digital touchpoints. This can range from simple to sophisticated
Some of the more sophisticated account holder data can cut across demographic, psychographic, behavioral and feedback data. While others may opt for using some subsets of these. In addition to this data, banks can apply human insight and creativity to interpret certain data elements to generate meaningful insights along with visual and textual cues that can be used to most effectively communicate with their audiences.
Another beneficial aspect for FIs is to generate and use buyer personas that represent the institution’s ideal customer based on their goals, challenges, motivations and preferences. Some organizations find it useful to map out typical account holder journeys across different stages and touchpoints to identify and capitalize on opportunities to shape the customer experience.
The science of personalization: Effectively using data and AI
Once financial institutions have built a solid understanding of their account holders, the next step is to leverage data and AI to deliver messages that are relevant and tailored delivered through their digital channels, at the appropriate time. Technology is essential for automating and optimizing personalization efforts across the entirety of account holder lifecycles.
Today, banks have a variety of tools and techniques at their disposal to ensure the following:
Data integration. Eliminating data silos, consolidating data from different sources and systems into a single platform.
Data quality. Ensuring data accuracy, completeness, timeliness and validity.
Data analytics. Applying descriptive, diagnostic, predictive, and prescriptive analytics to generate insights from data.
Data visualization. Presenting data in graphical or interactive formats to facilitate understanding and decision-making.
AI. Using machine learning models to enable intelligent functions such as identifying highest propensity buyers for certain products.
Although data and AI are invaluable assets, they also pose challenges and risks that must be responsibly addressed. Some of these factors include data privacy, security, ethics and regulation. When working with data for personalization, it is important to be responsible, transparent and ethical. This means having an intentional focus on accuracy and reliability, relevance, privacy and security. Ultimately, financial institutions will benefit from stronger relationships with their consumers who become more engaged as they find value in the personalized communications they receive.
Leveraging technology to help achieve personalization goals
Now more than ever, marketing automation technology platforms are available within the financial services industry to assist in uncovering opportunities and building robust personalized communications systems. The goal should be to have a well-rounded multi-channel platform that delivers exceptional personalized experiences for banking consumers while being easy to implement and easy to measure outcomes. Evaluating these platforms should include factors such as the use of disparate data sources, multiple ways to target communications, versatile delivery of messaging and offers, leveraging the valuable digital real estate of online and mobile banking platforms and a high level of automation for accurately directing and personalizing communications.
Today’s landscape is hyper-competitive, forcing financial institutions of all sizes to find ways of staying a step ahead of their competition by demonstrating how well they know their consumers through personalized experiences. FI leadership that fails to recognize this or the strategic growth potential of modern marketing technology will find risk getting bogged down in a traditional marketing quagmire that neither knows data nor personalization, risking stagnating growth and account-holder relationships.
Preetha Pulusani is the CEO of DeepTarget, a fintech company powering the digital communication revolution for credit unions and banks. For more information, visit www.deeptarget.com.
