To stay competitive in an economy increasingly dominated by big tech, banks need better ways to deepen relationships with their customers. Specifically, they need to leverage customer data to hyper-personalize experiences, ensuring the right messages reach the right customers at the right times. Unfortunately, most banks still struggle to assemble data in a way that promotes hyper-personalization. That’s in part because, faced with aging and outdated tech infrastructure, banks have been forced to make a difficult choice.
What’s the next big thing in context-as-a-service?
In our blogs, our digital engagement professionals explore new ideas and analyze the trends that are shaping our industry.
Hyper-personalization is changing the face of digital marketing. By unifying proprietary data with third-party and contextual data sources, customer-centric leaders in financial services can create experiences that meet customers’ needs in real time. Banks can push this evolution forward even further by creating alliances with other non-competitive brands and playing the role of “concierge” to tailor meaningful experiences down to the individual consumer.
It would be a mistake to think that the AI revolution will be this easy. Training a great algorithm — the AI equivalent of building a great app — isn’t enough to create a successful AI initiative at your bank. An algorithm is only as good as the data it’s trained on. And data management and governance in financial services is extremely complex, especially with data privacy laws like GDPR and CCPA now on the books. Adding to the complexity, it’s become increasingly clear that the easiest way for banks to access innovation in AI is to collaborate with fintechs.
It’s no secret that Big Tech companies like Apple and Amazon have shifted customer expectations over the past decade. Frictionless digital transactions, next-day shipping, and other streamlined omnichannel experiences have become the norm across multiple industries. Companies that can’t deliver may already find themselves falling behind.
It’s in every bank’s best interest to place well-aligned credit cards in their customers’ pockets. Customers spend 32% more and put a higher share of their monthly spend on credit cards when a card’s fee structures and rewards match their spending.
These primary card behaviors make it more likely that customers will purchase other products from the same bank, too. In fact, primary card customers are 15 times more valuable to banks than casual card customers over the long term.
The rise of digital banking has not meant the demise of the physical bank branch. In fact, it’s just the opposite. At many banks, branches are still the most important retail sales channel. In the same way consumers prefer visiting their local Apple Store to troubleshoot computer issues in person, they also like an actual human to guide them through major financial decisions.