Today’s environment has accelerated the evolution of the relationship between consumers and financial institutions. Consumers now seek a highly personalized experience that caters to their needs, wants and expectations — whether in a booming economy or facing the aftermath of a pandemic. As we look to a “new normal,” institutions from smaller credit unions up to global banks must adapt in order to change the customer experience.
What consumers want in the moment may differ from what they want long-term. Delivering a personalized experience can be challenging. However, it can be achieved through tech innovation and the power of data which makes t deeply tailored experiences possible. We’ve sketched out key steps financial institutions should follow to help meet changing customer expectations.
Focus on People Not on Products
Many financial institutions currently lack an engaging, cohesive customer approach. They focus on products, rather than centering their attention on the consumer. The institutions often have the tools and data, but struggle to implement the solutions suggested in a way that benefits them.
A banking institution’s current data storage structure could prevent the creation of a harmonious data system — one that works together across all channels. As a result, tapping into data insights that deliver a meaningful experience can be nearly impossible. Institutions are failing to drive forward data-fueled changes, forcing many to rethink investments in order to create systems that drive loyalty.
A business model designed to work in conjunction with an integrated customer view and which focuses on insights can offer the ability to deliver a customized experience that revolves around the customer journey, not the product. This will help institutions anticipate consumer needs. Our research shows that emotional connection, which is fostered through these experiences, is vital to customer loyalty and lifetime value.
Create the Customer Experience People Expect Today
Delivering personalized, contextual customer-focused experiences is no longer just key to long-term brand success, but vital for survival. By putting the right strategy in place, banks and other financial institutions can cultivate human connections that evolve with changing people’s needs, one touchpoint at a time.
Developing a strategy should begin with a few use cases that focus on a measurable value proposition and enable a positive customer journey. For example, the approach could involve growing the customer base with people that need a new mortgage.
Beginning with use cases instead of a larger digital transformation project helps to streamline the process and work through the interactions that will likely occur. Change takes time. Evolving a long-standing business model won’t occur overnight.
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Define and Deploy Data Analytics to Meet Consumer Needs
After outlining a strategy and identifying use cases, the next step for banks is to understand the data and insights required to take this from a concept to action. Each use case will likely require a different set of data and insights to inform decision making.
Institutions should begin by bringing internal and external data together to help reduce inefficiencies and obtain a single view of each consumer. The view should be highly optimized for marketing, sales and service. A cloud-based customer data platform can help bring the data together, enabling financial institutions to learn about individual consumer preferences. This can inform a thoughtful and valuable engagement strategy. For financial institutions data should be a core competency that is maintained and secured within company policies.
“Stitching together external data — stock market signals, social media interactions, browsing history, etc. — with owned data can inform a personalized offer.”
Then, deploy decision engines on the data based on key customer use cases to help gain a deeper understanding of what drives customer behavior. Artificial intelligence and machine learning are crucial to finding key insights that assist in determining the best moment, channel and message to engage with individual customers.
The goal is to do this in a timely manner — everyone has the ability to scale, but the capacity to do so in an amount of time that doesn’t diminish the value of the exchange is significant.
Once new insights have surfaced, determine how to orchestrate more relevant interactions seamlessly through all customer touchpoints. One example: Stitching together external data — stock market signals, social media interactions, browsing history, etc. — with owned data can inform a personalized offer. The same can be said for going through a consumer portfolio to help people with the highest propensity for a certain offer, within a certain timeline.
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‘Test and Learn’ Helps Guide Larger Financial Strategies
It’s also important to create a link between insights and strategy. A tactic in doing this is establishing a “test and learn” discipline and organizing the business around the results. There will always be a need to test and learn, as implementing any one result as the status quo will result in dated procedures very quickly. New signals, data points and customer needs will arise. Continuous testing and learning offers solutions for a world in flux.
An effective ecosystem can create a more relevant experience, support real-time decision making, and help to gather customer data for future iterations, for many customers, all at the same time. All of these efforts can offer a tailored customer journey for each individual. Once achieved, it can lead banks to increased sales and brand loyalty through new and existing customers.
New Directions Require Organization-Wide Change in Financial Institutions
Although all of these steps are key to helping banks create a human-centered experience, without organizational alignment, the point is moot. Leaders must also pivot the organization to support this new strategy and organize the business around it.
To adopt this new approach to serving the customer, financial institutions need to break down corporate boundaries around communication, budgets and responsibilities, and garner buy-in from all leaders — not only those in Marketing. View this as a mutual companywide vision, the goal being to improve the organization’s overall approach to putting the customer first.
Leaders must also look to build trust through transparency and consent. Consumers increasingly weary of their data being used to target them throughout their buying journey. This results in higher use of ad-blockers, pushing browser developers to phase out the use of third-party cookies and to encourage more consent management.
The end of third-party cookies is a major shift that poses a threat to many online revenue models and engagement strategies. However, it also creates a unique opportunity for banks and other financial institutions to be tenacious about customer first-party data and to put data systems in place that can help deepen customer relationships.
Agility is also needed to make changes swiftly, to leap the hurdles that various situations — like a downturn in the economy or an unexpected health crisis — may present. Responding to such changes means constantly reinventing a communication approach with a focus on people. It means sensing consumers’ emotional states, preferences and activities in real-time, then adapting the message, medium and the moment of your response to meet people where they are with what they need.
In banking, customer data and privacy are especially sensitive. By understanding how to use this knowledge responsibly, banks and credit unions can deliver the correct customer experience, amplifying the overall customer journey to become personalized and transparent. Consumers have increasing choices for banking services, and which provider they select may depend on the experience they deliver.
Olaf Tennhardt is a Principal at Deloitte Consulting LLP and the financial services lead for Hux by Deloitte Digital. Kate Erickson is a Managing Director at Deloitte Consulting LLP and aligned to Hux by Deloitte Digital.