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Personalizing the Multigenerational Bank Guest Experience

Loyalty programs, cash back rewards and tailored strategies for investing top the list of personalized banking preferences.

Today’s bank customers have high expectations when it comes to seeking a more personalized banking guest experience.

“People want personalized services from their banks, particularly loyalty and cash-back rewards, and saving and investing recommendations,” according to “Humanizing the Bank Customer Experience 2022,” a report based on research conducted by American Banker and marketing agency Monigle.

Younger customers are mainly interested in insights on how major purchases affect their cash flow, along with advice on saving money. Credit unions lead the way in personalization trends, beating out retail banks while personalization and challenger banks are catching up.

“Tailoring products and services to individual customers is a prime way to win loyalty,” says the report. “It’s also becoming more feasible. In 2022, customers of financial institutions report that they are more willing to share data for personalization purposes compared to 2021.”

When it comes to personalized experiences that bank customers value, loyalty programs and customized strategies for saving and investing top the list of customer preferences:

  • Personalized loyalty programs and cash back rewards: 47 percent
  • Personalized saving and investment strategies: 40 percent
  • Personalized interest rates for savings: 37 percent
  • Personalized digital dashboards, alerts and monitoring for financial accounts: 29 percent
  • Personalized promotions, offers and discounts from partner organizations: 22 percent

Generational differences also play a big part in those personalized banking preferences.

“When asked to rank these benefits, about half of Gen X and Boomer respondents choose personalized loyalty programs and cash-back rewards as their first, second or third choice, compared with 41 percent of Gen Z and 43 percent of millennials,” according to the report.

“Meanwhile, a quarter of those younger generations prefer personalized recommendations that provide insight about the impact of major purchases on their cash flow, available balances and income, compared with 17 percent of Gen X and 14 percent of boomers.”

One-quarter of Gen Zers are on the lookout for a bank that offers personalized recommendations on their spending habits and recommendations for how to reach their financial goals, compared with 19 percent of Gen Xers and 16 percent of Baby Boomers.

Meanwhile, 30 percent of Gen Zers want a personalized summary of their subscriptions,
including suggestions for ways to bundle packages that save money,” says the report.

When customers think about personalization, they’re often focused on big banks. However, credit unions currently outperform traditional banks when it comes to personalizing products to meet each generation’s unique needs, says the report.

“To achieve true personalization, banks need to segment their products toward different age groups and income levels,” according to the report. ”Efforts to deliver feedback about spending habits, for example, will see much more traction with Gen Z than with any other age group.

Banks should design their branches toward delivering the kinds of services that people want in person such as conversations about retirement or estate planning or other tasks that benefit from a trusted personal banking relationship, according to the report:

“For tasks such as checking credit scores and paying bills, banks should ensure their online functionality is efficient, because that is where customers are going first to get these done.”