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Importance of personalisation

by Roel Jansen | 28 April, 2020

The rise of technology, digital services and social networks have led to increased customer expectations. Consumers are demanding personalised services throughout all industries –  particularly banking and finance. Consumer perceptions of digital banking are changing.

A personalised experience

Increasing customer demands for speed, simplicity, and customer-centric offerings have dominated the strategic agenda across financial institutions. As loyalty towards service providers continues to decrease, banks must find alternative ways to retain and attract customers. A full view on their clients, covering their complete financial situation and behaviour is required to service them properly. However, this requires the technology to do so and banks usually struggle here as they have difficulty combining different internal and external sources into one client experience.

Individuals are no longer set on choosing their bank based on branch location and previous exposure. Rather, emphasis is now placed on recommendations from family or friends and the perceived trust in a branch – making it important to ensure good customer service.

According to the 2019 PwC’s Digital Banking Consumer Survey, the definition of a ‘primary bank’ is evolving. Younger generations are, for example, more likely than baby boomers to consider their mortgage provider to be their primary bank. At the same time, the younger demographic values recommendations from friends and family more than from a bank, with more than 50% of consumers under 35 saying they will open a primary bank account based on a trusted referral.

What does this mean for traditional banks?

The rise in customer demand for personalisation and the development in how consumers choose a branch highlights that traditional banks can no longer rest on their laurels when it comes to building long-term customer relationships. The days of attracting a customer into a local branch when they opened their first ever account, and keeping them as customer for life, are over.

Faster and cheaper digital banking services are emerging, with highly personalised benefits for sharing and protecting data, automated digital support, and bespoke advice that go beyond banking.

Traditional banks need to act quickly to stay relevant. They must ditch lengthy onboarding process and place customer experience at the heart of innovation, responding to new FinTech and challenger offerings by fully digitalising their services. This change will allow banks to improve their offerings making them more personalised and digital-led – resulting in an overall better understanding, interaction and satisfaction with customers. The transition to fully digitised services is essential as well as time sensitive, if banks are to stay ahead of the game.

How can banks offer personalised services?

Banks must draw on the vast volume of customer data they hold and use it to develop far more customer-centric and personalised services. They need to improve their understanding of what the data can tell them about customer needs, expectations and desires, in order to tailor their services accordingly.

This transition means going back to the basics. Banks must ensure that their data is in order – clean, protected and properly organised – and that they have the right analytical tools, including artificial intelligence and machine learning, to process it. Real-time data insights are now a business-critical asset for traditional banks.

Finextra - The importance of personalisation

Topics: Media coverage

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