The Most Competitive Banks Are Leveraging Technology That Fuels Hyper-Personalization at Scale

In today’s hyper-competitive market, it is essential to create meaningful customer experiences that set your company apart from competitors. Is your company truly able to differentiate itself? 

When it comes to personalization, banks rank second to last (out of five major industries) and only 14% of banking customers say their financial institution is “extremely effective” at delivering contextually relevant experiences and product offers.

Earning customer trust and loyalty requires organizations to understand and connect with their customers on an individual level. However, to be truly successful, it is important to deliver these tailored customer experiences at scale and in real time. The only way to thrive as a bank today is to embrace hyper-personalization as an enterprise-wide strategy.

What Is Hyper-Personalization?

Up until recently, banks could really only provide semi-personalized experiences by segmenting customers into general groupings. In fact, most of today’s personalization strategies are essentially just segmentation – even though modern technology allows the opportunity to do so much more for customers and businesses.

Banks that want to succeed in this increasingly competitive digital landscape must meet customer demand for tailored experiences by implementing a thorough hyper-personalization strategy.

Hyper-personalization takes personalization to whole new level by using context to engage each customer and drive value at every touchpoint throughout their individual journey. It isa strategy that recognizes the broader opportunities that come with nurturing customer relationships by focusing more on customer needs (e.g., valuable experiences) than business needs (e.g., product sales).

True hyper-personalization involves a high degree of complexity because it maximizes data value by leveraging advanced analytics, AI, and machine learning. However, it also involves some basic building blocks – such as breaking down silos, centralizing data, and bringing teams together across the organization – that create the foundation necessary for delivering highly tailored experiences.

Collaboration between all teams is crucial to developing a 360-degree understanding of customers and gaining deeper insights into each person’s journey. This means avoiding simply presenting someone with an array of offers but rather guiding them toward the optimal next step because of your knowledge about that specific individual.

When customers continually receive greater value from their hyper-personalized engagements, they become more loyal and more likely to convert on offers presented. 

What a Hyper-Personalized Customer Experience Actually Looks Like

Let’s imagine the journey a specific customer might go on:

Jane is your customer and she’s saving to buy a house. How do you know this? By using data from across your organization (as well as third party data) to inform you.

Recently, Jane has been looking at home loans on your bank’s website. Based on her customer data, you can see she’s been making monthly rent payments for several years and growing her savings account. You also know her credit score, age, occupation, where she lives, and the current real estate market.

You’re constantly evaluating Jane’s financial activity – including credit card payments, transaction history, mobile app engagement, etc. – to gain insights and deliver contextual, meaningful experiences that add value to her day. Consequently, you’re developing a holistic view of Jane by building a foundation based on data and analytics, which enables you to guide her through a more optimal and profitable journey.

You also subscribe to a third-party service that alerts you when your customers have credit inquiries with other lenders. Suddenly, an alert trigger informs you that Jane has just received an inquiry on her credit from a competing mortgage lender. Based on everything you know about Jane – including her deposit and wealth management holdings, Direct Deposit information from her employer, and last credit report (from a marketing-driven soft pull of her bureau) – you immediately run eligibility and credit policy checks. Moments later, you push a tailored pre-qualification offer to her mobile app with competitive terms that fit her specific profile.

The Key to Success: Achieving Hyper-Personalization at Scale

Customer expectations are skyrocketing and hyper-personalized experiences will soon become table stakes as banks continue to face increasing competition. To grow and solidify your customer base, organizations need to create contextual, individualized experiences at scale.

Consider how many different journeys your customers are on. Real-time insights require platform technology that enables organizationsto understand the exact progress of customers’ specific journeys and how to best help guide them, while also fueling automation that delivers hyper-personalized experiences millions of times over. You might not know exactly why someone turned down an offer – and gaining insight might be as simple as asking for feedback (e.g., a link saying, “Was this helpful?”). The point is that it is critical to learn as much about customers as possible.

To achieve hyper-personalization at scale, it is essential to access data from all sources in order to create analytics rules from that data that inform decision strategies. This can only be accomplished by leveraging a composable platform that gathers data, simulates, tests, and generates a continuous learning loop across all your various strategies.

This platform technology creates a low-code/no-code environment that puts the power in the hands of the business user, who can now test, monitor, and adjust strategies without needing IT assistance. It also fosters the collaboration necessary to develop a 360-degree understanding of each customer, as teams share information and work together using the same tools on the same platform.

With hyper-personalization, companies can build holistic views of the risks and tradeoffs associated with each customer based on learnings  from their data. With this approach, all teams can understand what’s best for each customer while also balancing the bank’s business goals.

There are opportunities to gain and provide value every time a customer interacts with your organization, whether it’s via website, mobile app, or bank branch. You must be engaging customers at all different levels and phases of their lifecycle journey. Finally, it is critical  to anticipate what the customer wants – for example, using insights from their app engagement (when/how/why they engage) to drive certain actions (such an immediate credit line increase or pre-approval for a loan).

Remember the main advantage that you have over your competitors: the rich data and history you share with your customers. Every interaction is a powerful learning opportunity that you can use to gain deeper insight and deliver greater value. 

About Author:
Darryl Knopp rejoined FICO in June 2017 as a Senior Director and led the FICO Advisors Digital Practice before being named to run portfolio marketing for FICO's applications. Before joining FICO, Darryl held many key roles at financial institutions through North America and Asia, including Chief Risk Officer of Grow Financial, a Canadian Fintech specializing in online lending and building software for financial institutions. Darryl is a frequent speaker at industry events including FICO World and CSRSA conferences.

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