Personalisation in Banking

When you sign into Amazon, you’re sure to come across Recommended for You product suggestions based on your browsing and purchasing history. Sign in to Netflix and you’ll find Because You Watched suggestions, based primarily on your viewing history. Head over to Facebook, Instagram, Twitter or virtually any other mainstream social network and your timeline is likely to be filled by algorithm selected content based on what you might like. If it feels like wherever you go, products and services are becoming more and more personalised, your feelings are spot on.

The data tells us we don’t just want personalisation, we’ve actually come to expect and demand it from the companies we do business with. Defined as a data-driven strategy that aims to create personalised, or ‘one-to-one’ communication with a single consumer or consumer segment, personalisation is now a major differentiator, especially for service driven organisations like banks. What started as a way for businesses to grow closer to their customers and serve them better has now grown to symbolise the ease and convenience modern businesses must deliver if they wish to thrive in the digital era.

So how do we give our customers the personalisation they want in the ways that will benefit them most?

Well, at the most basic level, we have to strive to understand our customers. This has always been critically important for banks because banking is built on relationships and trust above all else. But it’s especially important in today’s world where there is a significant generation gap between our millennial customers and older generations. One of the first steps to banking personalisation is making sure that banks can offer the services most desired by our customers.

Therefore, while we’ve always placed a high importance on getting to know our customers and understanding their needs, we’ve also had to adapt to ensure that banking remains a personalised experience for earlier generations of customers while making sure that millenials and generation z have access to the services they want.

For example, we know that while digital banking is a priority for a wide cross-section of customers, it’s especially important to millennials and generation z. No-fee banking, however, is a very high priority to younger generations. Let’s back those points up with some research. According to the balance up to 94% of millennials stated that no-fee banking was a priority for them. Think about that, that’s huge! Now consider the fact that according to Gallup millennials are 2.5 times more likely to switch their bank than baby boomers if they are dissatisfied, and you’ll see that banks have a very strong case for adding these services to their portfolios.

For us, these insights into what our customers want and need have naturally extended to us developing our RepublicOnline Internet Banking service and RepiblicMobile banking app to give them the flexibility of banking safely, anywhere, anytime. We’ve also recently expanded our offerings to include M-Power, a suite of services tailor-made for millennials which includes an account with no monthly service charge, a credit card with no annual card fee, personalised financial guidance and other features that meet the specific needs of this group.

But while a personalised banking experience might start with products and services, it doesn’t end there. A truly personalised experience should also allow customers to engage with their bank in the ways they prefer whether that is through social media, text messages, internet banking, a website or a physical bank branch. But when making these different channels available we also have to keep in mind that not only do customers opt to use different channels, they also prefer to do so for different services.

So, for example, while only 11% of customers would opt to open or close an account online, a full 60% of customers want to pay bills online. It’s a reminder that while offering flexibility to our customers, we too have to be flexible in our approach and that personalisation is more often an expansion of options than a replacement of one over the other.

It is expected that mobile and artificial intelligence technologies will continue to drive the personalisation trend in banking for the foreseeable future. AI-enabled digital assistants are already being used to generate data-driven portfolio-management advice for users. Financial planning, for example, can now be tailored to each customer, their current stage in life and their goals, all without human intervention but with greater efficiency – yet another personalisation benefit.

All signs point to the conclusion that the personalisation trend is here to stay. It will to be exciting to see how banks and other businesses use this feature to bring greater efficiency and added value to our customers in the future.