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How to Personalize the Banking Experience

How banks can deliver better service with personalization.

Today’s bank customers are looking for personalization: advice tailored to their stage of life, tools designed to help them avoid fees and tips that will help them grow their nest egg.

But according to J.D. Power, which conducts yearly banking customer satisfaction surveys, “banks have struggled to deliver on customer expectations for personalization as nearly half of customers have now moved to primarily digital-centric banking relationships.”

Customers want it all: the ease of doing their banking and financial management digitally, combined with old-style personalization that makes them feel they’re not just another number.

“Personalization can help banks deliver superior customer experiences and build trust and loyalty,” research and consulting company Forrester states. “By personalizing interactions across the customer lifecycle and across the full spectrum of physical and digital channels, banks can demonstrate to customers that they know them well, understand their needs, and care.”

With that in mind, here are four ways banks can offer personalized service in today’s digital banking world:

  1. Consider personalized pricing. Many customers say they’re willing to switch banks to get better pricing on products. “To tackle this issue, banks can utilize personalized pricing models,” technology consulting company Itransition states. “In this case, the price is defined based on customer segment preferences and expectations rather than product quality and market trends. Making use of customer big data and advanced analytics, banks can figure out the best service price for a particular customer segment drawing on a customer’s behavior, propensity to purchase, loyalty level, CLTV, and current needs.”
  2. Offer personalized financial advice. Banks are in a perfect position to offer tailored financial advice, guiding their customers to financial health. One example: many customers would love to get savings tips based on their own spending habits. “Mint and thousands of other personal budget apps have tapped a growing demand for tailored budgeting advice,” Itransition states. “But given that banks have a much more granular insight into customer profiles, a bank-native personalized budgeting solution can become one of the most effective tools for increasing customer engagement.”  One survey found that about half (51 percent) of customers want a chatbot that can give them “personalized financial advice in plain language.”
  3. Send personalized alerts. Customer demand for personalization includes a strong desire for alerts that will help them manage their money in real time and avoid nasty financial surprises like declined cards and stealth fees. Surveys show that customers want their banks to alert them when a direct debit is going to be withdrawn from their account and when they’re about to overdraft their account. Many also would love alerts that show how much money they have to get them through until their next paycheck hits the account.
  4. Give personalized shopping perks. Banks have massive amounts of data about where their customers shop. And customers would love to see that data used for their own advantage. For example, about two-thirds of customers want to get deals and offers to help them save at their favorite retailers. “Banks can also use customers’ location data to offer relevant services at the right time,” Itransition states. “For example, when a customer enters a shopping mall, their mobile banking app can notify them about partner retailers nearby.”

Many industry experts agree that banks have yet to truly meet, let alone exceed, customer expectations for personalized service. The good news is, that means there’s plenty of opportunity to grow in this area and “wow” your customers with your detailed knowledge of their needs and their money.