In the second half of May, I hosted a webinar discussion on Hyper-Personalisation in Financial Services. I was joined by Ian Ashby, Principal Strategist for Customer Service at ServiceNow, Dave Wallace, Founder of NMD+, and Jonathan Allan, CMO at Puzzel.
The premise of the webinar was that technology is changing the way people manage their money. Now, while fintechs have raised the bar, many incumbent financial service firms are catching up and keeping pace through their own ambitious digital transformations.
But, digital transformation and the development of new digital channels is not enough.
Customers are increasingly choosing firms that put their needs front and centre, understand what they want, and tailor their products and support to match.
That means adopting a hyper-personalised approach, where every interaction that you have a customer is made relevant and valuable to them.
However, many firms are nowhere near achieving this, with many still treating customers like numbers and asking them to be patient for long wait and response times a year into the Covid situation. This is no longer acceptable.
The problem is that many of the incumbent financial institutions’ digitisation efforts have been cost plays and have been primarily focused on pushing people into new digital channels in order to reduce costs. As a result, many of their offerings have been reduced to digital-only experiences that have often been described as being soul-less and too generic.
In some respects, fintechs have been exploiting this opportunity as they have focused on making onboarding, transactions, and the finding of information much more straightforward. But, many of them have also struggled to cope with an influx of new customers wanting to talk to them about issues and problems placing many of their systems under stress.
Therefore, over the last 12 months, we have seen that the foundations were never really in place, and there is still a lot of work to do for all parties.
After some discussion, the panellists agreed that hyper-personalisation is about making every interaction you have with somebody relevant and valuable to them.
This can be enabled through the use of data, analytics and artificial intelligence (AI), but to achieve that requires financial institutions to adopt a more proactive mindset. Currently, the majority are sitting on so much data, yet they are doing nothing with it. As a result, they need to actively seek permission to use that data to become more proactive and to start to move towards hyper-personalisation.
Meanwhile, while fintechs may have changed expectations in the market and have given incumbents a bit of a push, they must do more and build on the base of ‘it’s easier to do business with us’ that they have created.
But, it’s not just about leveraging data and becoming more proactive. Crucially, it’s also about offering customers choices about the sort of experience and services they want.
To achieve that, financial institutions have to work harder to understand their customers better, engage with them more and build their relationships with them.
The discussion highlighted five clear steps that organisations can take to pursue hype-personalisation.
Over the last 12 months, the massive shift to digital has shown that customers are increasingly not going to tolerate a poor experience. Customers want a digital experience equal to or preferably even better than what they used to get as a physical experience. Moreover, competition is intensifying, and the pressure on financial service brands to change is increasing. Banks and their boards need to realise this and shift their focus to being customer first, not cost first. They should commit to a strategy of customer transformation that is enabled by digital technologies and aspires to deliver a hyper-personalised experience to every customer.
The right strategy and level of commitment from the board on down will help eliminate many of the silos that plague many experience improvement programmes.
A single plan centred around the customer will drive alignment between experience, marketing, data, operations, technology, security and compliance teams and allow them to move quickly and work more seamlessly than they do today.
Organisations have to pick the right technology that helps them connect their front, middle and back offices, thus simplifying their processes and operations. This will allow them to harness their data and then leverage analytics and AI to become more proactive in how they approach service and experience.
However, this is only part of the picture. As Polish American linguistic scholar Alfred Korzybski once said, “the map is not the territory”.
Financial services companies need to work harder and go further to build a deeper understanding of their customers, their preferences and what a personalised experience means for them.
To do that will require them to go and talk to customers and to ask them questions like:
Asking those questions will allow financial service companies to build up insight around different customers and their psychographic preferences surrounding privacy, customer choice, data protection, security etc.
It will also enable them to get the permissions they need around the use of the data that drives hyper-personalisation.
However, it would also inject a greater degree of humanness into a digital experience that has often been accused of being soul-less and offer the opportunity to co-create new customer propositions.
Finally, the panellists offered a few words of warning and some advice.
Don’t try and boil the ocean. Start small.
Look for small opportunities to really make a difference and build from there.
When it comes to customer experience and traditional financial service institutions, all is not lost, and the battle is still to be fought. While fintech brands may be leading the way with simplification and removing friction, nobody is yet showing customer experience leadership and driving towards hyper-personalisation. Those who do will define the next iteration of what a great financial services customer experience is and will see massive returns in customer appreciation, acquisition, retention and growth. The technology is there, but now organisations need to start thinking like the customer, meeting customer expectations and building deeper and stronger relationships with customers – through personalisation.
Customers are waiting.