Examples of personalization in banking to help build strong relationships

Today’s consumers have come to expect personalized experiences across their digital lives. This includes recommended purchases when they shop online, carefully curated playlists on their music streaming services, and TV show suggestions based on their watch history.

And unsurprisingly, consumers expect the same from their banking experience: in a study commissioned by Blend, 65% of consumers say that banks should make it easier to find and shop for financial products. 

The benefits of successful personalization can be significant. For every $100 billion in assets that a financial institution has, it can generate up to $300 million in revenue by interacting with customers in more personalized ways. 

Unfortunately, many providers seem to be struggling to deliver tailored experiences that their customers expect. Up to 94% of banking firms are failing to deliver personalization. In fact, 67% of consumers feel that most retailers deliver a much better personalized experience than their bank.

Financial services providers now have an opportunity to do better — and advances in technology can help. By carefully using information provided by the customer, your organization can now anticipate needs, make personalized recommendations, and be there for the moments that matter.

In order to illustrate the real-life results that technology can help deliver, let’s explore three hypothetical scenarios to understand how personalization in banking can work effectively.

Freya had just started to come to terms with the fact that she’d never be able to afford a house because of her poor credit score. It was frustrating, but she assumed she would always have to rent.

However, one day she received a tailored mortgage offer from her bank. Because she was a customer of her bank for several years, the bank had built up a good understanding of her financial situation. Recognizing that she might be interested in purchasing a house and knowing that she had saved up enough money to put down a reasonable deposit, the bank put together a personalized offer that showed her what sort of rates and payments she could expect.

At the time of her mortgage application, the bank also allowed Freya to simultaneously take up a better deal on her credit card. Not only was the process easy, but it also gave her an opportunity to improve her credit score and improve her overall financial wellness.

When Vimal’s small design business got flooded following a local storm, he was devastated. Not only did he lose a huge amount of equipment, but his offices were uninhabitable. On discovering that his insurance claim was going to take months to come through, he felt his only option was to lay off staff.

Thankfully it didn’t come to that. Vimal’s credit union, with whom he held a commercial mortgage, had set up an alert to report if any members were impacted by natural disasters in the region. That meant they knew of his predicament and were able to reach out with a personalized offer for a micro loan to tide him over until his insurance claim came through.

Lara had recently inherited her family’s farming business and had plans to make it bigger and better. She wanted to apply for a credit card so that she could purchase some new equipment. She had called her community bank to inquire about an application, but she was concerned about when she was going to complete it, since she had little opportunity to leave the farm during the daytime.

She needn’t have worried. As a specialist in the local community, her bank understood the challenges she was likely to come up against. That’s why they sent her a link to a credit card application that was pre-filled with the data she had provided over the phone. She was able to complete the application after working hours on her mobile device and was quickly approved for a credit card that offered cashback on farming equipment. 

All of these scenarios demonstrate that when organizations use previously provided customer information in a considerate way, they can deliver simple, easy, and tailored experiences.

Consumers are on board with this: 86% say they are happy to share their data if it means they get a better, more personalized experience. And in a separate study, 73% of consumers agreed that their financial services firms should adopt emerging technologies that make doing business with them easier.

Master the art of personalization and your organization can move away from the blanket product-pushing approach of yesterday, while adding real value for customers, across every aspect of their financial lives. And as an added benefit, you’ll also be better equipped to foster loyalty and benefit from improved revenues. In a study commissioned by Blend, Forrester Consulting advised, “the more sophisticated and holistic a bank’s personalization efforts become, the more effective they are at driving acquisition and long-term customer metrics like customer lifetime value.”