The banking industry is in a state of flux - driven by a rapid change in how the institutions differentiate themselves from one another.
Historically, price was the main point of difference as banks tried to set themselves with industry-leading rates or their best-value products. This began to change in recent years as finance brands zeroed in on more specific target markets with unique service approaches alongside their products, which were all designed to appeal to certain groups over others and give them the upper hand in specific customer segments.
Even more recently a new wave has emerged, with disruptors like Monzo Bank leveraging technology and the provision of more convenient banking to attract customers. Having once been lower priority platforms, the standard of apps and online banking is now central to an organisation’s brand - often over and above the traditional focus of in-person branch services.
The rise of the tech stack as a selling point is now giving way to a new banking frontier – perfecting personalisation and enhancing the user experience. According to a recent Capco research report, 72% of customers rate personalisation as ‘highly important’ in today’s financial services landscape.
In this second of our two-part series, we look at how banks can take a practical approach to implementing three core lessons from these media streaming giants about becoming personalisation leaders in the finance sector.
1. Invest more in the user experience
One of the most striking features of platforms like Netflix and TikTok is their user-friendly interface – easy to navigate, aesthetically pleasing and personalised to the customer.
Banks, on the other hand, often employ complex setups in a bid to showcase their wide range of capabilities. The issue is that, for most customers, that’s not what they’re looking for.
In fact, a NICE survey found 9 in 10 consumers want absolute omnichannel service and expect a seamless experience when moving from one communication method to another.
A slimmed-down, data-driven, tailored interface that displays what that specific user wants to see is a simple way to help create a more user-friendly experience. By leveraging data on previous functions they’ve used, personal preferences or even external services they’ve signed up to, banks can provide personalised features for their customers like financial goal-setting or products that cater to individual customer needs.
These being served up immediately, while ignoring superfluous functionality, is a simple way to significantly improve the user interface and its usability.
2. Start simple; delve into your own data first
Media streaming services didn't start with complex datasets and complicated algorithms - they grew over time from a simple starting point. Banks can adopt the same approach in their quest for improved personalisation.
Financial institutions already capture huge amounts of data - transaction histories, spending patterns, and common customer interactions. And while there are the obvious associated GDPR pitfalls in banking, everything that’s recorded can, in theory, be used to improve personalisation and the user experience.
A wealth of customer data exists and is tracked, such as risk appetite, financial goals, declared income, credit history, and personal needs. All of this can be used to create much more sophisticated offerings that appeal directly to each individual customer and, according to McKinsey, that can have huge benefits for businesses too. Their recent report found personalisation can drive up to 15% revenue growth for financial services companies specifically.
3. Centre all your operations around constant personalisation
It’s a common issue for organisations to create a team whose stated aim is to improve personalisation for customers. However, for it to be a truly effective endeavour, it needs to be implemented across the entire banking business as an organisational culture shift.
Spotify, Netflix and TikTok excel in this area because personalisation is the first and last point of focus for their platforms, so everyone working within the organisation needs to consider it. Banks can learn from this by embedding personalisation in what they do instead of committing a single team to ‘achieve’ it.
Historically, banks have been reluctant to expand beyond their traditional boundaries due to regulatory impacts, restrictions and concerns over customer trust. However, according to a Genesys study, 64% of millennials value a customised experience that uses their transaction data over any privacy concerns they have, and there are now several disruptor brands that are starting to push the limits. That includes sharing data and linking up with other apps and third-party services if there’s a clear customer benefit to it.
Furthermore, gathering data from surveys, focus groups and media monitoring can help identify pain points and areas of improvement. According to a 2022 retail banking satisfaction study in the US by JD Power, 78% of people said they’d continue using their bank if they received personalised support but also said that only 44% of banks are actually delivering on this.
By analysing trends and patterns, banks can proactively enhance their personalisation strategies - cultivating a culture of innovation and experimentation to foster the next generation of banking.
Openbox is the premium digital experience partner to the financial services industry that seamlessly connects technology and customer. Armed with decades of experience, our consultants work with you to deliver high quality digital experiences that meet industry regulations and customer expectations, every time. Our dedication to exceptional collaboration and communication, paired with our deep industry knowledge, sets us apart from other digital experience partners. We work with you to drive successful digital adoption, strengthening your customer acquisition and retention. Be the only choice for your customer with Openbox by your side and be the digital experience leader in financial services.