Three Hurdles to Personalized Banking CX (and How to Remove Them)

Nearly every financial institution recognizes the importance of personalization, but too often bank and credit union efforts come up short because they don't successfully address the need for relevance, value and transparency. The solutions are well within reach, however, as several examples show.

As the COVID-19 pandemic continues to send consumers online, financial institutions know they need to deliver more personalized digital experiences to stand out. An Adobe survey found that 76% of companies recognize the benefits of providing personalized customer experiences. But recognition doesn’t mean that personalized CX happens, or happens successfully. From my experiences helping banks and other financial institutions with their digital transformation efforts, personalization is easier said than done. But the ROI of getting it right is more than worth it.

The means to deliver more tailored experiences to more customers at once than would have been possible even five years ago clearly exists. However, financial institutions and their marketing teams face three hurdles when developing personalized experiences: ensuring relevance, delivering value and meeting transparency expectations regarding use of data. Failure to fully meet these requirements typically causes personalization efforts to come up short. Careful planning and the right tools can overcome them as discussed below.

Hurdle 1: Delivering Relevant Experiences at Scale

It’s no secret that consumers like receiving engaging, relevant content from their financial institution or any favorite brand. On the flip side, poorly executed, generic-looking content can change a loyal customer’s opinion of your institution for the worse. The key factor that makes all the difference between great and mediocre content is data — accurate, relevant data.

HSBC, for example, tested AI-powered personalized content against static, uniform content on its mobile app’s home page. The personalized results dramatically outperformed the static pages when it came to click-through rates to product pages.

That isn’t surprising: Great content doesn’t just deliver information in an engaging way, it delivers an experience, and great experiences are driven by data. The more data your team can draw from, the more they can personalize the experience they deliver. And the more personalized the experience delivered, the more delighted customers will be — and the more data they will be willing to share in return.

Don’t believe that? More than three-quarters (76%) of respondents to the survey mentioned earlier said they’re comfortable sharing personal data in exchange for better customer experiences. In addition, respondents to our 2020 personalization survey told researchers that three of the most impersonal types of digital content — pop-ups, spam email, and irrelevant offers — were among the most frustrating parts of digital marketing.

Hurdle 2: Ensuring Your Personalized Experiences Have Value

As effective as personalization can be, it’s meaningless if it doesn’t deliver a valuable experience. Only one quarter of consumers have location services turned on for all apps they use, but two-thirds are willing to share their location with an app that informs them about events, deals, or when they’re near a store.

Value is also why more than half of consumers are willing to receive marketing messages from mobile apps that are more likely to reward them, while only four in ten are likely to opt in for email or text notifications, which often don’t reward them. Too many marketing campaigns are planned around activities that serve the institution developing them, and are framed in a way that emphasizes their benefits to the company. The guiding principle when designing personalized experiences should be how they benefit the consumer.

Oregon Community Credit Union, for example, launched a campaign that illustrates the importance of developing a personalized, relevant and valuable customer experience. Seeking to increase the number of credit card accounts opened by its 158,000 members, the institution’s marketing team sent pre-approval emails to everyone who qualified. But rather than simply telling people they were pre-approved, the credit union used dynamic fields and personalized URLs to create unique pre-approval messages for each member. Each personalized email included the member’s name, the type of credit card that they were approved for, approved credit limit, and approved rate.

The campaign exceeded OCCU’s goal more than twice over: Aiming for 400 new credit card accounts within six months of its outreach efforts, the institution signed up 944, with an acceptance rate of 3.42%. Overall, the campaign has led to more than 2,150 new cards opened and over $22 million in new credit card lines in less than 18 months.

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Hurdle 3: Keep Use of Consumer Data Transparent

Another key differentiator between valuable and meaningless CX is transparency. While consumers are more than willing to provide personal data in exchange for valuable experiences, they also want financial institutions and other companies to respect their privacy and be transparent about how they use their data. At the moment, their privacy often isn’t fully respected and it’s placing their loyalty in jeopardy.

According to Adobe’s report, The New Data Deal, 50% of consumers are comfortable sharing their full names, but 82% of companies are collecting names. And while only 25% of consumers said they are comfortable sharing their phone numbers, 75% percent of companies are collecting them.

To close this gap between expectations and practice, banks and credit unions should make better use of their existing data, which is often stored across disparate systems. In fact, the marketing team’s first priority when developing personalized campaigns should be integrating their data if it isn’t already. Data integration is key to developing a single customer profile, which in turn leads to the development of a more easily mapped — and personalized — customer journey.

Equally important, of course, is obtaining consent from customers before collecting their data. The percentage of companies that recognize the benefits of providing personalized experiences is the same percentage of consumers comfortable sharing data in exchange for better experiences. However, the burden is on institutions to demonstrate the types of relevant, valuable experiences consumers stand to gain by sharing their data.

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