In 2022 the number of digital banking users in the U.S. passed 200 million. A single experience, offering, or message isn’t going to fit them all. Of course, there’s a fair amount of overlap in the Venn diagram of lives and needs. But each of us is different in crucial ways— income, age, goals, assets, responsibilities, etc. And consumers’ needs can turn on a dime, especially during economic slowdowns.
Satisfaction requires personalization
According to Jennifer White of J.D. Power, customer satisfaction is, “no longer predominately about being fast, efficient or convenient.” The most important factor determining customer satisfaction, she says, is “supporting customers during challenging times. ... Customers are expecting a personalized mix of financial advice, hands-on help with problem resolution, and guidance on how to grow their money.”
To paraphrase a recent piece in The Financial Brand, the key to personalizing digital banking experiences is to deliver friction-free experiences for the most common tasks, while determining when extra attention is necessary. In short, the experience should say, “We know you, and we’re here to serve you well.”
Personalization requires conversation
Arizent’s 2022 State of Innovation survey reports that 89% of banking professionals believe personalized experiences are either critical or very important. But only 12% are aggregating data across processes/systems to provide personalized experiences for both consumer and business customers.
What has emerged, though, is a sort of not-quite-personalization that’s heavily dependent on “personalized” messaging. But, as Ron Shevlin sees it, the paradigm needs to shift from messages to conversations. Currently, most attempts at personalization fizzle once the customer responds (or fails to respond) to a message. It’s a one-sided and stand-alone event. He offers an updated definition of personalization: “Having conversations with customers tailored to each interaction, channel, and the type of relationship they have with the company.”
Personalization requires data
You can’t connect with those you don’t know. Personalization requires the comprehensive aggregation of data from across every account holder touchpoint and channel. It also requires that you distill that data into traits and insights that inform the way you interact with your account holders.
The industry still has work to do around data. According to McKinsey & Company, “Despite significant investment in AI, only 8 percent of banks are able to apply predictive insights from their machine-learning models to inform campaigns.” But “by codifying, unifying, and centralizing key analytics and supporting processes, these organizations generate 5 to 15 percent higher revenue from their campaigns and launch them two-to-four times faster.”
But data isn’t just a means to drive campaigns and cross-selling opportunities.
Personalization requires relevance
Mastering the above would be a huge step forward for the industry. But true personalization requires flexibility, speed, and relevance. Rather than simply populating digital experiences with advertising content, what if personalization meant that the digital banking experience could adjust in real-time to account holder behaviors, patterns, and preferences?
If their rent goes out mid-month and their account is low as the payment approaches, their digital banking app could offer ways to help, such as money movement, borrowing options, PFM tools, or even—if their rent has been increasing—affordable mortgage options. There are business banking applications to this approach as well—user experiences tailored to healthcare providers, real estate brokerages, governmental agencies, etc.
Some FIs may hesitate at the thought of surrendering their customer relationships to a digital branch. But none of this has to fully replace person-to-person interactions. The truth is that consumers and businesses are already deeply entrenched in the digital channel. Personalizing digital experiences enhances the relationship; it equips FIs with more robust data to inform in-person interactions while empowering them to spend more time on higher-touch services and relationships.
At Q2, we call this approach Dynamic Personalization. It’s the aggregate experience created by building audience segmentation with behavioral traits. The solutions involved include a composable dashboard for displaying content, a rapidly configurable UI, tools for building and rebuilding audiences, the ability to manage and interact deeply with traits through tagging and search, and integrations with tools relevant to users—all of it powered by a data-rich platform and advanced analytics.
What makes Q2’s approach genuinely dynamic is that data is collected and distilled, with the experience shaped by and around the individual user. And, while the experience is driven by data, FIs will always have the ability to provide rules around how the system behaves, ensuring the dynamics are specific to their brand.
Genuine personalization goes beyond picking products and tossing them towards best-guess customers; it’s tailored, real-time, and relevant. It’s built on account holder needs and it meets them where they are—both in their digital and their financial journeys.