As unemployment claims reach into the tens of millions during the COVID-19 pandemic, consumers and businesses are looking to banks and credit unions for financial relief, access to government aid and guidance on how to weather the economic storm. This represents a massive opportunity for those institutions to complete an evolution that was already underway — becoming gateways of trust that deliver value to people beyond just facilitating financial transactions.
However, to meet people’s needs during the pandemic, banks and credit unions must reach them one-to-one yet at scale — and most lack that capability.
Financial institutions sit on treasure troves of data, but rarely put it to good use. Instead they persist in sending out irrelevant mass communications instead of tailoring messages and experiences to individual customers. Now institutions must do what they should have done a long time ago: build out digital infrastructure allowing delivery of personalized recommendations, offers, content and experiences.
With shelter-in-place orders affecting much of the U.S., branch traffic has slowed to a trickle, while call centers are swamped with incoming queries, leading to long wait times and reduced satisfaction. In this environment, and beyond, digital personalization will be the most important way banks and credit unions keep customers engaged. Forward-thinking organizations are already using digital channels to reach consumers with personalized guidance, information and offers while they’re isolating at home — and building deeper long-term trust in the process.
Increasing Engagement Via Mobile Banking Channels
If your institution hasn’t built out these digital capabilities yet, it’s not too late. You can still meet customers where they are during quarantine: on their phones.
Delivering personalized experiences via a mobile banking app is less disruptive than calling customers — which you don’t have time for anyway. With a mobile app, messages aren’t lost in crowded inboxes or physical mailboxes, as they are with email and direct mail. In fact, consumers concerned about their account balances check their mobile banking apps more frequently than usual, creating a massive opportunity for engagement.
You don’t have to redesign your apps from scratch to deliver personalized experiences. Look for third-party solutions that will integrate with your existing mobile channels for maximum ease of implementation. A good personalization solution will also assemble data on your bank or credit union’s backend to ensure that experiences target the right audience.
For example, you could target people who have set up direct deposit, but haven’t received their usual paychecks in the past month, with offers to set up a “payment vacation” from mortgages and other bills. The most advanced solutions will integrate more than just transaction data, incorporating information from public databases, industry partners and customers’ own smartphones to tailor experiences even more specifically.
With these tools in hand, you’ll be able to use your mobile channels to offer customers personalized support at scale during the COVID-19 crisis. As the economy recovers and people return to work, consumers will remember you had their backs when they were struggling, deepening your relationships for the long term.
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Turning Institutions into Data Vaults Also Builds Trust
Your institution’s role in the economic recovery will likely extend beyond simply offering advice or waiving payments and fees.
Prior to the pandemic, frustration was already growing with the limited options individuals have for controlling sensitive personal data. Privacy legislation in Europe and the California Consumer Privacy Act were parts of a good start, but ultimately the adtech ecosystem is too complex for individuals to navigate by clicking through confusing pop-up notifications. People need someone to manage their personal data on their behalf.
This is another area where the coronavirus pandemic will accelerate a change that’s already in progress. Banks and credit unions are ideally positioned to become data vaults that hold customers’ sensitive personal data ranging from their browser histories to their health records.
Using measures like data tokenization — the replacement of sensitive data with unique, indecipherable identifiers — your institution could share customers’ personal information with other entities according to rules that customers themselves define.
For example, a person might allow their data to be shared with clothing retailers in exchange for more personalized online shopping experiences. That customer would be able to withdraw their consent and their data from the arrangement at any time, retaining complete control.
As the impacts of the COVID-19 pandemic continue to grow, the need for banks and credit unions to serve as data vaults is even more urgent. To drive economic recovery, we need a system that can credibly identify people who have already recovered, so they can be sent back to work in frontline positions that interact with the public. However, such a system would need to put individuals’ privacy and autonomy first.
Using the framework described above, banks and credit unions could securely store consumers’ health records and generate a mobile “immunity certificate” to display to potential employers upon request. Having a reliable way to identify people in this way would greatly accelerate economic recovery, particularly in low-income communities that are hardest hit by the virus.
Doing so would also put your financial institution — and its newly expanded role — at the center of the post-pandemic recovery.
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Thinking About Financial Institutions’ Role Beyond the Pandemic
If you can think ahead during this crisis, your institution might emerge from the economic downturn stronger than it entered it. By offering personalized guidance and material help during the pandemic, it will build deep bonds of trust with customers. This will contribute to future success.
The economy will recover. In time, activities like vacations and dining out will become possible again. At that point institutions can use their digital infrastructure to start making personalized lifestyle offers and recommendations to customers at scale. From hotels to grocery store chains, a wide variety of companies will look to partner with you in your new capacity as a data vault for customers’ personal information. Consumers will trust you with more of their data, enabling you to offer more personalized experiences, not just for your bank or credit union, but on behalf of its partners, too.
That type of scenario is actually well within your reach. Use the time you have now to identify growth opportunities, rather than simply slashing headcount and spending. In a recession, these are the types of moves that tend to help businesses grow fastest during the economic recovery.
So keep a cool head and look to the future during this crisis, instead of just reacting to the present. In that way you’ll set up your bank or credit union to take the lead in the brave, new post-pandemic economy.