In 2018 only, 30 of the Fintech 250 companies have reached a valuation of $1B or more. According to a PricewaterhouseCoopers study (Source: Reuters, 2017), established financial services firms could lose ~24% of their revenue to fintech companies in the next 3-5 years.
Over the last years, customers’ increasing expectations have extended from security to user experience as well. As a result, the pressure on the traditional banking companies to keep up with the digital transformation is higher than ever.
Google, Amazon, and Apple have set a high standard regarding how a great user experience looks like and for financial institutions, this could be an important differentiator.
What do customers want?
Customers expect their financial institutions to start delivering personalized experiences beyond being dropped in segments split by age or income. Although companies acknowledge this demand, they fail in meeting the expectations and the relationship between the consumer and the banking industry seem to be quickly deteriorating (Source: GfK, 2017).
So how can financial companies strengthen their relationship with customers? We have put together 3 possible use cases which proved to be successful and could be the start of your analysis.
Personalized Product Recommendations
More and more financial companies are investing in customer journey because they understand the trends and the higher demands from customers. Moreover, on the basis of a good customer journey, there is always relevancy.
Using Machine Learning technology, you can process a massive amount of data about your customer to have a better understanding of what’s relevant for him. Imagine a young customer who has just changed the home address and updated his personal profile with his bank to reflect this change. He might be interested in home insurance obviously, and maybe a better deal to combine his home and his car insurance in 1 policy.
Recommending appropriate products saves time and makes customers feel heard and appreciated.
Personalized Messaging & Content
Another example of staying relevant is displaying personalized copy and call-to-action on the website. Not all customers are in the same lifecycle stage and have the same preferences. Thus, it’s quite reasonable that the next best steps are tailored to effectively motivate and make sense to each customer.
A customer prospecting for the right type of credit or insurance policy might need more content with terms and conditions, credit simulators or just pros and cons of each type. A customer in the decision stage might already need to know what documents to prepare for the application, while a customer who already has a deal might be interested in ways to optimize it.
360-Degree Customer Profile
Last, personalization in banking can go beyond calling customers by their name or offering them specific products.
Sitting on data goldmines, financial institutions have access to customers’ spending habits. They could easily leverage this information taking the role of a financial advisor. The key is to focus on understanding customer’s needs, wishes and past decisions.
A 360-degree view of customers’ profiles can provide valuable insights into customers’ potential income, spending habits, or risk of financial distress in the future. This information can be used to create a personalized and consistent user journey across multiple channels, delighting customers into loyalty.
Building strong personalization is a big challenge but has massive potential if done right. Consumers clearly prefer recommendations that they wouldn’t have thought about themselves, so now is the moment to show that you have been listening and learning about each of them.