As the financial services marketplace becomes increasingly competitive, consumers are also changing their expectations and demanding a more personalized digital experience. With new fintech entrants as well as technology giants such as Google, Amazon and Microsoft joining the fray, traditional banking players are increasingly realizing that simply providing a coherent and consistent digital experience within a channel is not enough to keep the customer satisfied. Nowadays, digital banking needs to encompass and cross all channels, online and face-to-face; the question now is how to best merge the digital experience with real personalization, irrespective of the delivery channel, in a consistent and meaningful way.
Personalization Lost in the Race to Automate
As banking moved to more cost-effective digital channels, the old personalized branch service was lost. But customers in both the retail and commercial markets are feeling disintermediated, and given an opening market, are voting with their feet and engaging more inclusive providers. Today’s digital banking environment demands a stronger and more consistent customer experience at every touchpoint. And this improved experience is not just about online or mobile channels, it must expand from there using technology to bring in expertise from bankers in the form of personalized service and advice, whether solely on a digital device, on the phone or in a branch.
In reality, the majority of financial institutions of all sizes are unprepared to provide personalized advice, communication and offers. This is evidenced by the fact that emerging alternative financial providers are seen as a threat to most legacy players primarily due to their ability to provide a more personal digital experience. As these alternative financial providers become more sophisticated, their delivery of service, regardless of channel, will blur into one holistic interaction and the intelligent use of data will be leveraged to optimize the experience.
Mutually Beneficial Information Sharing Beyond Online
These days, consumers expect banks to look and act more like their non-financial partners in how they gather and use their personal and transaction data. They expect their financial institution to understand where they stand financially and what may lie ahead. When a customer engages online or in the branch, they expect a consistent experience. In a data-driven age, the tools to provide an improved and better-targeted personal service across all channels are increasingly affordable. But what is missing is the willingness and foresight to implement.
Data and information sharing have become the core currency of digital banking; banks need to be proactive as well as reactive. By implementing artificial intelligence (AI), machine learning and behavioral analytics, banks can make smart and perfectly timed suggestions and recommendations that exquisitely match user demands and needs. This goes beyond the current recommendation engines that match generic products and services to large customer demographics. The technology available now ensures that offers and advice can be truly personalized on an individual basis, for consumer or business, and that the same service can be presented consistently across all channels and devices.
The Age of Hyper-relevance
It is understandable that consumers want to be treated as “special” in every business relationship; banking is no exception. Consumers can see through weak, automated communications that are mass-delivered based on time-dated metrics.
However, by employing techniques of predictive analytics, AI and machine learning, banks can provide a hyper-relevant capability that is delivered in real time using digital devices to the mobile app or the bank teller. Today, financial organizations can use internal and external data sources to achieve new levels of insight, with a greater contextuality and timeliness than was ever possible just a few years ago. It is private banking for the masses.
Looking into the upcoming world of open banking where increasing volumes of financial data and preferences are available to more players, banks can position themselves as financial wellness hubs that consolidate customers’ financial positions to better analyze and serve through a holistic and all-encompassing view.
Digital certainly is the new normal, but the normality needs to be personalized, or it becomes irrelevant and nothing more than a suite of unconnected channels.