Personalization Across all Stages of the Consumer Journey is a Must for Retaining Bank Customers
Recent research indicates that customers want their primary financial institutions to look and act more like their non-financial partners in how they gather and use their personal and transaction data. They expect their personal financial institutions to understand where they stand financially and what may lie ahead. Consumers want their financial institution partner to securely manage their finances, understand their goals and preferences, and proactively deliver the right offers and services to help them achieve financial well-being.
However, the majority of financial institutions of all sizes are unprepared to provide personalized advice, communications, and offers. Alternative financial providers are seen as a threat to most banking organizations due to their ability to produce digital personalization, and banks are starting to find that personalization across all stages of the consumer journey will be a key differentiator for retaining customers.
In a recent survey by GfK, customers responded that they “think the bank has their best interests in mind” 34% of the time while banks perceive customers think it is 43%. Similarly, when customers were asked “if my bank makes me feel like I am a number,” customers agreed 20% of the time while banks thought 10%. There is clearly a gap between the banks’ and the customers’ perceptions.
Customers believe that banks should know their short- and long-term financial goals so that they can provide support in meeting those goals. However, only 24% of respondents believe that their bank understands any of their current goals.
Some financial organizations are leveraging new digital applications and advances in predictive analytics to take what they already “know” impersonally about an individual (from transaction data and other sources) and are transforming that insight into solutions that are predictive, personally relevant, and useful.
While institutions know the importance of providing real-time, customized guidance, the vast majority of organizations are not prepared to deliver. There is a significant gap in the ability to provide contextual insights and solutions that illustrate that their organization is looking out for their consumers. A key missing component of this deliverable is the ability to provide these insights in real time through digital channels.
More than half of all regional banks, community banks, and credit unions offer basic levels of personalization through their digital channels, such as mobile and website, and plan to offer advanced services to leverage customer insights to deliver personalized service.
According to The Financial Brand, consumers are spending 25% of their time on their mobile devices, but mobile ad spending is only 12% of all ad spending. The primary reason for the increased focus on in-app mobile banking offers is that this channel can provide a solution that can capture the targeted consumers’ attention and encourage them to interact without interrupting their mobile banking transaction. Compared to other marketing channels, it is estimated that the growth of mobile advertising will increase significantly more than any other channel. In-app mobile banking marketing works well because it combines the power of rich customer insights already on file with location data, which allows a bank or credit union to better understand context and increase engagement.
There has been a significant increase in the number of banks using the pre-login space to promote new products and services. This is accomplished by using some form of a promotional banner that appears behind or on the main login screen. But banks need to be wary that significant investment in the pre-login space may go to waste as biometric authentication methods replace the need for passwords and speed up login processes.
The main areas for post-login promotional messages are alerts and push notifications. Beyond simply using alerts to warn a customer about a recent transaction or when an account falls below a certain threshold, organizations are also using these types of post-login messages to inform about a new product or service or to encourage the use of rewards.
Providing personalization across all stages of the consumer journey is key to retaining customers in an evolving marketplace. In addition, it's a must for growing business through relevant new product or service offers. Through digital personalization, financial institutions can utilize customers' personal and transaction data to understand where they stand financially and communicate customized guidance to their customers.
Learn more about NIIT Technologies' extensive experience in digital transformations with large to mid-size banks and other financial institutions. NIIT Technologies specializes in helping our clients provide personalized attention and solutions to their customers.