29 September 2020
Now that customers have regained trust in financial service providers with their money and their data, financial well-being and financial wellness are topics that are top of mind for the majority - especially as we continue with the uncertainty of current times. Banks and other financial service providers are moving quickly to proactively support consumers with sensitivity and empathy. In parallel, the nervousness around face to face interactions, use of public transport and meeting indoors, are further fueling the ever-growing need for providers to innovate their digital channels and products to not only meet, but exceed customer expectations.
It’s encouraging to see that providers are taking the initiative in being proactive with financial health checks. However, they seem to be missing an opportunity. There’s little evidence to suggest they are combining individual survey results with existing customer data and insights. With so much financial vulnerability across the UK, using this combined data is powerful in addressing the advice gap and providing much needed support.
To really address this advice gap, you need to treat each customer as an individual. The spray and pray approach to messaging just doesn’t cut it anymore. In fact, through research Acxiom carried out in 2020, there are some key themes emerging that need to be addressed. Consumers are telling us that age, gender, and income have a huge impact in the way financial service providers should consider their engagement strategy. It’s time to listen.
The research also points to the need for consumers to receive relevant, timely, personalized communications for suitable financial products, advice, and collateral, enabling them to make more informed financial decisions. Overall, the nation trusts banks and building societies and this foundation means the time is right to enable better advice and be laser-focused on striving for a one-to-one relationship.
An abundance of data, but how to use it?
Day in, day out we hear that financial providers have a plethora of data available to them, which is great in theory. The reality is that the various data buckets coming from a multitude of sources are disparate and siloed.
To make hyper-personalization and one-to-one engagement possible, providers must make use of their first, second and third party data and build a detailed understanding of every single customer. Profiles of some customers are limited, but there are providers who can enrich customer data with second, and third party data. The more relevant the data you have about people, the more personalized you can be regarding what’s important to them and build that one-to-one engagement.
In today’s climate, this should be easier as people prefer to engage with banks digitally. The onus therefore, is on banks to keep it relevant and choose the next best action at the next best moment. And let’s face it, it isn’t just millennials who are choosing to interact in this way today, COVID-19 is forcing this trend - even my grandad tracks his finances on his phone. So with digital becoming the new norm, banks need to leverage all of this real-time contextual and behavioral digital body language from customers to enhance their understanding of them and better support a relevant, in-context engagement at the next best moment, in the truest form of an opti-channel experience. The landscape has changed; it’s time to adapt.
It’s not all doom and gloom. Research shows that consumers are willing to share more data for personalization and expect value and relevance in exchange. In their 2019 Global Financial Services Consumer Study, Accenture found that more and more people are looking for personalization. This was further emphasized in a Boxever and YouGov Survey where consumers confirmed that they want integrated services that address their core needs. And – critically – they’re willing to share data with their providers to get it.
So the demand is there. The data is available. But the reality is that many financial service providers are still not realizing the full potential of personalization. McKinsey & Company say the personalization opportunity in banking could be $200-$450 billion. Source: McKinsey - A technology blueprint for personalization at scale.
How can financial services providers execute an advanced personalization strategy?
For financial institutions to start delivering on personalization with financial well-being in mind – and to drive more relevant and valuable engagement for their customers when they need it most, they must collaborate across the business streams with a clear strategy considering the various data collection points.
Here are four suggestions for providers looking to embark on the insight-led personalization journey.
- Centralize your customer data
- Align business priorities with data strategy
- Bring in the right partners and technology
- Don’t forget advanced personalization can support your regulatory compliance responsibilities
- Trust is there, and should be used as an enabler to support the community across all channels of communication.
- Consumers want to help you to help them - we need to keep listening and taking action on what they are telling us.
- Financial services – like all industries – is facing a huge challenge. But the opportunity is there to come out on the other side with increased trust, and stronger and more profitable long-term customer relationships. Personalization and the smart use of customer data can go a long way to making that all possible.