It’s no secret that COVID-19 has redefined how customers are engaging with their banks. Chances are, consumers are already flocking to your digital channels, looking for a safer, more convenient alternative to the in-person experience. Unfortunately, many of the banks and credit unions we talk to are struggling to meet these demands. That’s why personalization has become such a big priority. But before you start your journey down the pathway to personalization, let’s dispel 5 of the biggest myths around this.
Myth 1: Customers want to customize how they manage their finances with personal financial management (PFM) tools.
Budget tracking and spend monitoring are a few of the capabilities a banking app might offer. But they’re just the tip of the iceberg. Notifying a customer that they’ve reached 80% of their goal to put a downpayment on a house is useful information, sure, but imagine if you could provide a personalized recommendation on what to do next? Right now, only 1 in 10 customers are adopting personal financial management tools, and let’s face it, that adoption rate just isn’t good enough. Meanwhile, half of customers want their banks to proactively recommend helpful products and services. Imagine if, rather than simply alerting a customer when they’ve hit that 80% savings goal, you could deliver a notification from your bank informing them that they’ve been pre-approved for a mortgage with a checklist to help them on their house hunt? That level of engagement is what customers are looking for.
Myth 2: Tailored offers and discounts should be the top use cases for your personalization strategy.
When considering use cases to optimize personalized banking experiences, empathy must be a key element. By transitioning from a sales mindset to an empathy mindset, your bank or credit union can truly deepen the relationship by building trust with new and existing customers. Empathy doesn’t have to be an offer or a discount to a product or service. It simply has to be an experience that makes your customer feel seen and understood, oftentimes this is as simple as providing advice and recommendations based on their individual needs. For example, providing tools and best practices to your small business customers on transitioning to eCommerce given the current climate.
Want to learn how you can implement a personalization strategy at your bank or credit union that can differentiate and win in-market? Watch our webinar “Everything You Need to Know About Personalization in Banking”.
Myth 3: It’s difficult for banks to quantify the benefits of a personalization strategy.
To date, many of the strategies that banks and credit unions have deployed would be considered basic personalization; for example, sending auto-generated emails with dynamic fields that might include a customer’s first name. Only 6% of financial institutions are going beyond, delivering 1:1 personalized advice, offers and recommendations, catered to customers’ needs in the moments that matter. And the business impact among these early adopters is staggering. On average, their acquisition rates increased by 3-6%, incremental revenue increased by 10-30%, while retention rate improved by 10-30%.
Myth 4: Banks need third-party data to effectively implement personalized banking experiences.
Without a doubt, the most important element of personalization is data. You already have a wealth of data that can be used to enable personalized banking experiences. 48% of leaders at top organizations cited their number one challenge to personalization is not the lack of data, but not knowing where it is and how to use it. Often, this is a result of siloed data sources coupled with complex data infrastructure. Therefore, to implement a successful personalization strategy, orchestrating your existing high-value data is more effective than adding another data source.
Myth 5: Implementing a personalization strategy is a multi-year project that involves data science and AI teams.
You don’t have to build new infrastructure, new data sources or new digital assets to implement a personalization strategy that will drive results. There are many bank and credit union case studies that went to market with a personalization engine in as little as 60 days. This was all done by leveraging existing core assets, datasets, and digital channels. The most important component of your strategy is ensuring that the entire platform can be managed end-to-end by your business teams, without having to involve data science or technical teams on a day-to-day basis.
Turn the promise of personalization into a reality in 60 days. Learn more in our webinar: “Everything You Need to Know About Personalization in Banking”.