The intersection of privacy and personalization is a hot topic across all industries, not least the banking industry. Consumers are growing increasingly skeptical of what brands know about them and how they use it. Nearly four out of five consumers believe companies know too much. And they are questioning more often which brands they can trust to use their data responsibly.
There was a time when the banking industry could rest comfortably knowing it was solidly trusted. But trust in banks was badly shaken by the financial crisis and other more recent revelations and has been up and down since. Amazon, by contrast, is the brand that consumers trust the most with their data, according to a survey of more than 1,000 consumers our firm conducted. Almost half the respondents say they trust Amazon to use their data responsibly, putting the company ahead of banks as a whole, along with Apple, Google, and others.
This trust gap increases among younger consumers born into the Amazon era: Millennials and Gen Z admit to trusting Amazon twice as much as their own banks.
How is Amazon building such a lead in consumer trust? Let’s dive into this more along with other key findings from the report.
Willing to Share Personal Data for Value
One of the more dramatic findings from our research is that nine out of ten consumers are willing to share behavioral data in exchange for a highly personalized experience.
Even though consumers express data privacy concerns, clearly the vast majority are willing to share behavioral data (site interactions, items purchased, etc.) in exchange for more personalized experiences. This represents a major opportunity for financial institutions.
Today’s consumers want to receive discounts on the items they’ve shown interest in, helpful alerts on the products and services they want, and future recommendations relevant to their needs — all tactics Amazon leverages to deliver experiences that keep their customers loyal.
This means that the more clear a brand is about how they’re using their customers’ data — and actually follow through with delivering the personalization their customers want — the more consumers are willing to trust the company.
Top Reasons Consumers Are Willing to Share Their Data with Amazon
The following data, from SmarterHQ’s research is retailer-oriented, but gives financial services marketers strong clues as to the data/value trade-off.
- To receive exclusive discounts on products I like.
- To have issues resolved quickly and hassle-free.
- To receive back-in-stock alerts for products I want.
(Banking application: Notify me when rates drop so I can refinance.)
- To receive personalized product recommendations.
- To find products faster and easier.
(Banking application: Personalized mobile banking app or online web page to highlight relevant products or services.)
While financial brands are investing more resources into digital marketing, many still struggle with personalization. The Digital Banking Report’s survey of financial marketers revealed that only half believe they have sufficient data analytics capabilities to really understand their customers — and just two out of five said they had the capability to help them deliver highly personalized experiences.
If banks want to build trust and loyalty with their customers, it’s key that they adopt the right technology and support that can keep customer data secure, leverage data to identify trends in behavior, and use this knowledge to tailor to their customers’ specific needs.
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How to Know When to Back Off
When it comes to privacy and personalization, consumers prefer brand interactions that provide a more convenient, cheaper, and positive experience — all significant reasons why Amazon shoppers stay loyal. At the same time, consumers also want brands to know when to back off or leave them alone. In fact, our study found more than three out of five consumers (63%) would stop buying from a brand after a “creepy” interaction.
Key point: Marketing tactics consumers perceive as creepy include excessive push notifications, irrelevant emails or alerts, and too many communications.
Consumers’ Top 5 Desired Marketing Tactics
1. Special discounts on products relevant to me — on the website and by email.
2. Promoting new products I may like on the website and by email and digital ads.
3. Suggested products based on things I’ve bought in the past — offered via email or on the website.
4. Website reminders to replace/rollover/upgrade products coming due.
5. Reminders on the website or by email of applications I left unfinished.
Banks and credit unions can respond to these trends by sending customers highly targeted promotions, special offers, and communications based on their past activity with the institution. For example, up-selling relevant credit services or sending helpful financial advice based on previous interactions.
A basic, but very important, point: Financial institutions must ensure that consumers can accomplish tasks such as making payments and transferring funds as seamlessly as possible whether by mobile, online and in-person. The most targeted marketing in the world won’t mean much if the application process and product functionality are needlessly complex.
- Crafting Amazon-Like Banking Experiences Easier Said Than Done
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- Beware: Customers May Cut Banks From The Digital Journey
The Most and Least Popular Marketing Channels
When it comes to marketing communications, just over half (51%) of consumers prefer email over other marketing channels. Consumers feel email communications are less intrusive because they most likely signed up for the brand’s email list on their own or made a recent purchase.
Other marketing channels like social media and direct mail are considered less popular. Three quarters of consumers report push notifications are more intrusive than other channels because they consider their phones to be everyday tools that are part of their personal space.
So does this mean banks should stick to email and forget about other marketing channels? Not necessarily. What’s most important is taking your customers’ individual communication preferences into account. For example, mobile push tends to be more popular with Gen Z, and it can be an effective way to communicate with those who prefer it. But it’s essential to consider all other channels and to avoid inundating consumers with irrelevant messages, such as a notification for a payment they already made or service that no longer applies to them.
Ultimately, it comes down to sending accurate messages on the right channel at the right time.