Why delivering personalised communications is a must in financial services

Melissa UK Team | FinTech

Study after study highlights personalisation is what consumers increasingly expect from the brands they engage with. For example, research from Epsilon reveals that 80 per cent of consumers are more likely to do business with a company that offers personalised experiences. With online financial institutions that rises to 89 per cent, and for those banks with a physical high street presence it’s 77 per cent, according to their study.

Furthermore, research by Boston Consulting Group highlights that over the next five years $800 billion in revenue will shift to the top 15 per cent of companies who get personalisation right in financial services, retail and healthcare.

In fact, personalisation is particularly important in the financial services sector, because in the highly commoditised world of banking products it’s the customer experience, driven by personalisation, that really sets financial institutions apart.

Unfortunately, many banks are still stuck in the mindset of delivering generic one size fits all communications on a new product or service. It’s this approach that modern consumers are less attracted to with their individual needs and requirements, and is the reason why a transformation in the thinking process is required if financial institutions are to grow and prosper.

Learn from tech giants

It’s the tech companies such as Amazon, Google and Apple, who are setting the standard in the delivery of personalised communications. They are the experts in using data effectively to deliver personalised customer communications and therefore experiences.

There’s a lot the financial services sector can learn from the personalised approach these behemoths take, who might yet attempt to take advantage of open banking and muscle in on this industry.

To embrace personalisation banks need to start cleverly using the latest machine learning, artificial intelligence (AI) and cloud technology to turn their customer data into actionable insight and deliver that holy grail of one-to-one personalised communication with customers at the right time – often in real time.

However, prior to embarking on the personalised communications route banks need to have an up to date, clean and enriched customer database. Only then can they undertake effective analysis to make learnings from the data and deliver a single customer view (SCV). It’s this 360-degree picture that will help form the basis of their personalised communications activity and enable banks to become the source of trusted identity their customers use for all of their digital banking activities. This is vital if they want to grow and prosper in the increasingly competitive open banking age and successfully take on the new entrants, be they big or small.

Personalise using transactional data

It’s worth bearing in mind that those in financial services are particularly well placed to deliver standout personalised communications to customers at the appropriate time. This is because they have access to a huge amount of very valuable transactional data on customer spend that they can analyse and use to deliver highly personalised upsell and cross sell communications. For example, if it appears a customer has booked a holiday the bank can communicate travel currency or travel insurance offers at that individual. Also, through such communications, banks can become trusted advisors by alerting customers that they may need a credit or a savings product at the right time.

Personalise customer service

Personalisation also plays a key role in improving customer service, which means banks should put processes in place that identify customers when they get in touch. Such technology should learn, register and make the rest of the organisation’s systems aware, so that wherever and by whatever touchpoint the customer interacts with the bank they get the same level of service and treatment because they are pre-identified.

It’s time those in financial services invest in the appropriate data cleaning, analytics tools and technology that can personalise the customer experience in real-time to drive loyalty, trust and additional revenue from their customers. By doing so they will ensure their continued growth in an increasingly competitive open banking world.

If you have any questions, you can get in touch at info.uk@melissa.com or at 020 7718 0070 for additional information.

If you are interested in continuing the conversation, please connect with us on Twitter.

How can banks succeed in this new digital age?

Melissa UK Team | FinTech

Looking back over the first year of Open Banking, it’s only fairly recently that we have started to see the first signs of the innovation it promised in terms of improved services for customers in the digital age.

For example, Barclays working with other banks to offer customers access to all their account information from rival banks within its core banking app, as it seeks to improve the user experience.

To date, it’s mainly been the challenger fintech companies that have been shaking up the industry with online banks such as Monzo, Starling Bank and Revolut leading the way, along with financial service providers such as iwoca and Funding Options on the lending side.

However, the recent announcement by Apple of the launch of Apple Card brings a new level of functionality to the credit card marketplace, highlighting that the digital and technology behemoths have the banking sector firmly in their sights. It’s on the back of online retailers and media companies such as Rakuten in Japan offering internet banking products and services.

With Apple making this move, it can only be a matter of time before the likes of the other big players such as Google and Amazon look to expand into mainstream financial services as they look to be the all-in-one hub for our increasingly digital lives. These huge businesses have already demonstrated their service credentials, built trust with customers in how they use their data and also have ‘accounts’ with customers, such as Amazon with Amazon Prime. They have, by and large, proved that they can effectively handle and analyse big data, are experts in artificial intelligence (AI) and cloud computing. They can also provide a strong customer experience and engender trust in the digital space — all areas that many banks have traditionally struggled in.

The threat is clear for incumbent banking service providers. Once an industry is opened up to wider competition, it’s almost always the established players that take a hit. For example, according a recent report by Ofgem, the big six energy providers are continuing to lose market share to new energy suppliers and seeing their profits fall as a result.

But it doesn’t have to be this way. The answer for banks is to ensure that their service provision is simple, accurate and reliable, particularly online, so there is no reason for customers to go elsewhere for bank services. To help deliver this, banks must hold clean, up-to-date data on their customers that supports them in achieving a 360-degree customer view, and in providing a strong personalised experience. This will help banks to become the source of trusted identity that their customers use for all of their digital banking activities; vital if you want to grow and prosper in the Open Banking age and successfully compete with the new entrants, be they big or small.

Furthermore, it’s critical that banks continue to innovate and find ways to adopt new digital service capabilities and integrate them into their systems more quickly. This can either be by themselves or with technology partners. They should also consider acquisitions of those in the fintech space who are doing a great job of delivering innovation while building a large customer base.

Open Banking provides a great opportunity for banks, and is something they need to embrace more rapidly. Otherwise the banks we know today could be left holding the bulk of low-margin, high-cost customer accounts, while the more profitable business is stripped by savvier digital and tech mega-corporation challengers such as Apple, or the agile, smaller ones.

If you have any questions, you can get in touch at info.uk@melissa.com or at 020 7718 0070 for additional information.

If you are interested in continuing the conversation, please connect with us on Twitter.