Only 25% of banks say their marketing is either predictive or prescriptive, so the industry needs help modernizing its customer engagement approach. As digital competitors continue to raise the bar for customer experience, traditional banks and credit unions must evolve their personalization capabilities or risk losing customer relationships.
On a recent episode of the Banking Transformed podcast, host Jim Marous spoke with Curinos’ Olly Downs about how banks can leverage AI and machine learning to overcome personalization bottlenecks and deliver more sophisticated customer experiences.
Breaking Through the Personalization Bottleneck
While financial institutions often discuss the need for personalized solutions, a significant gap exists between aspirations and implementation. “We call this the personalization bottleneck,” explains Downs. “If you think of the transition over the last 30 or 40 years in banking from truly personalized relationships between a customer and their banker, in person in a branch, to the proliferation of channels of engagement with the customer, it’s put pressure on three major areas: analytics and audience, marketing creative and creative development, and the ability to experiment.”
According to Downs, the challenge is that most banks operate on quarterly campaign cycles that need to catch up with rapidly changing market conditions and customer needs. “To truly create a personalized engagement with a client, it’s pushing on a scale and pace of business processes and the ability to act with supporting technology that isn’t humanly possible with the teams that most banks have,” he notes.
This bottleneck is particularly evident in how banks approach personalization across different channels. “Putting those together in the right way and ensuring you can orchestrate them in a way that makes sense and doesn’t create a discordant customer experience is very challenging,” Downs explains. The transition from batch campaigns to ongoing, personalized dialogue with customers requires new approaches to technology and business processes.
Banking vs. Retail Personalization
Unlike retail environments that focus on driving immediate transactions, banks face unique challenges in leveraging personalization to build long-term relationships. “In banking, we’re thinking about creating the best relationships that last almost a lifetime and go through many waves of someone’s financial life,” Downs explains. “The structure of that relationship is very different. The value of the now is very different.”
This fundamental difference requires banks to think differently about how they approach personalization. “Understanding when’s the right moment is critical and, in fact, even more critical in banking than it is in retail because there’s a much less discretionary nature, with much more consideration given to making step function changes in accounts and planning,” says Downs.
The distinction becomes even more apparent when comparing banking to retail personalization. “In retail, we’re talking about matching millions of people to tens of thousands, even hundreds of thousands, of products – many of which they can decide to buy almost on a whim,” Downs notes. “But in banking, we’re thinking about creating the best relationships that last almost a lifetime and go through many waves of someone’s financial life.”
Leveraging AI for Sophisticated Personalization
Platforms like Curinos’ Amplero can help banks overcome personalization challenges through AI-powered optimization and experimentation. “If you have 20 elements of customer profile, channel, and creative that you want to explore the outcome of, people think that means you have to test 20 things. You have to test two to the power of 20 things,” Downs explains.
To put this in perspective, Downs offers a striking comparison: “The length of the universe in seconds is two to the power of 18 approximately. So, if you could do one experiment per second, it would take you longer than the length of the universe today to do it.” This illustrates why AI and machine learning are essential for true personalization at scale.
Platforms like Amplero can enable banks to:
- Package critical use cases like cross-selling, onboarding, and deposit retention
- Adapt experiments in real-time using reinforcement learning
- Generate and optimize creative content while maintaining compliance
- Measure downstream impact on customer lifetime value
“We have clients achieving eight to 10x return on investment with Amplero that’s been playing out and sustained over multiple years and quarters at this point, not just transiently,” notes Downs. This sustained ROI demonstrates the platform’s ability to deliver long-term value through personalization.
Breaking Free from Campaign-Centric Marketing
One of the critical shifts Downs advocates for is moving beyond traditional campaign-based marketing. “You can’t cover all the dimensions of personalization with traditional marketing because things change so quickly. You want to make changes quickly,” he explains. Instead, he recommends an emphasis on rapid iteration and dynamic content.
“Our best clients have less than five dynamic templates in play. Usually, we start them with one or two,” Downs shares. “What we focus on is, well within this template, what pieces can be modified? What are the pieces that can be dynamically inserted? Different subject line content, graphics, layouts, and formatting.”
This approach enables banks to respond more quickly to market changes and customer needs while maintaining compliance and brand consistency. ” I can add ten subject lines in the next 30 minutes. Once they’ve been reviewed and approved, they can flow into testing in that dynamic template and be launched very quickly,” says Downs.
The Path Forward: Three Keys to Success
For banks looking to advance their personalization capabilities, Downs recommends focusing on three key areas:
- Start with the customer perspective rather than accounts. “Nine times out of 10, we encounter a focus on accounts, not a focus on customers. The customers are the ones who make the decisions, and the customers are the ones who have the needs that we’re trying to meet with products, including accounts.”
- Ensure accessible analytics for marketers: “Do I have accessible analytics data that I can access to start understanding my customer base? Before I have elaborate and sophisticated technologies, do I have accessible analytics and a reasonable understanding of how I engage with my customers?”
- Build experimentation capabilities: “If we can’t do experiments, even rudimentary ones, we really won’t be able to get feedback on what we’re doing, and we can’t get going. So, what is the most straightforward way I can experiment?”
Overcoming Common Challenges
Downs acknowledges that banks often face internal obstacles in implementing personalization initiatives. One common challenge is what he calls “perfect being the enemy of the good,” where institutions spend excessive time trying to perfect communications rather than adopting an iterative approach.
To address this, Downs recommends separating eligibility from targeting in personalization efforts. “We eliminate regulated data from consideration for personalization at the beginning except for to the extent that it affects eligibility,” he explains. This approach helps streamline compliance while maintaining effectiveness in personalization.
The Future of Banking Personalization
Downs is excited about the democratizing potential of generative AI and other emerging technologies. “We’re democratizing the ability to act on knowledge, synthesize data, and improve experiences,” he says. This ability to synthesize data, recommend action, and then quickly take and learn from that interaction has so much promise in many different areas.”
The impact on customer relationships could be transformative. As host Jim Marous noted, “Every time I talk to you, I’m talking to you based on our last conversation. And as that builds, we get more and more free with our information and say, ‘You know what? You can make a better decision for me than I can make for myself.'”
The message is clear for financial institutions looking to compete in an increasingly digital banking environment: personalization is no longer optional. Success requires the right combination of strategy, technology, and organizational alignment to deliver truly personalized experiences at scale. With the right approach and tools, banks can overcome the personalization bottleneck and build stronger, more profitable customer relationships.