3 Keys to Better Personalization of Banking Services

People don't want cookie-cutter financial products anymore. If Amazon can tailor its home page for every repeat visitor, they reason, banks and credit unions ought to do as well. If they don't many people have no qualms about moving on.

As America slowly returns to normal, people hunger for new digital financial services and products to help them adapt to the changes wrought by Covid-19.

But as financial services go digital, they’ll come head on with the demands and expectations of digital consumers — a consumer for whom personalization is table stakes. Banks and credit unions will have to deliver not just new or innovative products, but a financial experience tailored to each person’s unique needs and challenges.

Just one problem: The financial services industry isn’t exactly known for taking the personal approach. While two-thirds of consumers expect their financial service provider to understand their unique needs, only 27% say the industry is truly customer-centric, according to Salesforce.

Here are three principles that belong in every personalization strategy.

1. Build for Adaptability

Financial consumers expect bespoke solutions. They want options, and they want flexibility. In fact, the vast majority say they would consider switching financial institutions if another service provider simply offered better flexibility on liquidity products such as small-dollar loans, according to Payments Journal.

For financial service providers, that means building a product portfolio with adaptability in mind. In the long term, these institutions will need to navigate the changes to their product portfolio required by the digital economy and become adaptable enough to know both when to partner and build and how to make their business practices optimal to shifting consumer expectations within today’s increasingly uncertain financial environment.

Key Takeaway:

An institution's financial offerings should be customizable … and they should be easily customized.

Far too many financial institutions get stuck trying to use technology and data to create the perfect products. But it’s far more important that you create the conditions for adaptable products. In both the short and the long term, flexibility is your best bet. Let consumers tell you how they want your products to look — and make the business decisions that enhance what you can offer, should people request it.

At PenFed, we’ve found that things as simple as expanding our free checking options or providing a broader array of rates to choose from for savings accounts and credit cards can go a long way. The key consideration is providing customers with clear and impactful choices to make in how they will relate to you through your products.

2. Cultivate Trust

Consumers want and need a financial institution they can trust. But in more ways than one, consumers don’t think traditional financial institutions are deserving of trust. In general, consumers think that their bank is secure and competent, but research by Accenture indicates that only 43% trust that their bank is interested in their long-term financial well-being.

Every financial institution must cultivate trust by demonstrating that its incentives align with consumers’. That means showing that you are willing to put them first and that you prioritize their satisfaction. (As member-owned financial institutions, credit unions should have an advantage here.)

The relationship between trust and customer satisfaction is a two-way street. A growing number of financial institutions are adopting new practices to improve customer experiences and in turn cultivate trust in their products and services. The use of emerging technologies like artificial intelligence and data analytics, for example, have allowed financial institutions to deliver seamless, consistent and enjoyable customer interactions.

People immediately know and appreciate the difference. Even small technological changes like digital-first account management tools can make an impact. One way we’re making these changes at PenFed is giving consumers a quick and easy digital experience for managing their credit cards. This gives them more insight into their own spending and purchasing data, which is one of the simplest ways to help customers feel like they are in the driver’s seat and to build trust.

But despite these digital gains, storytelling and a people-centric approach remain crucial to building trust and a sense of community in financial services. After all, this often-complicated business needs the human touch.

That’s where social media platforms can come into play. Social media offers all businesses, including financial institutions, the opportunity to establish a community presence and create engaging, memorable stories with their customers.

But social media won’t just be a way to engage your customers; it’s also an opportunity to spread awareness about almost everything else you’re doing for them. One in three consumers uses social media to discover new products or services, according to Sprout Social. That’s a chance to reach people that no financial institution should pass up.

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3. Be Sure Your Products Are Continually Evolving

In addition to offering customizable products and cultivating trust, banks and credit unions should be offering product sets that are always undergoing revision, in response to people’s changing needs.

This is a part of nimble design. Consumers want to know that their feedback matters. They want to see their feedback reflected in the products they can access and use.

In one survey of banking customers, a majority blamed their decision to switch providers on their old institution’s lack of response to poor customer experiences. Notably, many respondents indicated they might have changed their mind about switching if their financial services provider had better attempted to salvage the relationship.

How to Retain Accounts:

If you're nimble enough to respond to consumer feedback quickly and effectively, you can keep even the most demanding consumers satisfied over the long term.

The first step towards doing that is to understand what people really want. Today, financial institutions have numerous analytical tools at their disposal to help them garner feedback across all channels.

At PenFed, we used member feedback from during the pandemic to quickly respond and add additional benefits to both our Pathfinder Rewards card and our Platinum Rewards card. At the same time, we worked to improve our credit card digital experience and introducing a free checking product with no fees. Member feedback is important to PenFed. It isn’t easy but keeping an evolving product set is key to maintaining consumer loyalty.

Ultimately a positive customer experience depends on your ability to evolve your products and services and adapt to market changes, new trends and emerging technologies. There are lots of different ways to succeed. You could, for example, implement an integrated experience management system that provides the opportunity to manage all aspects of the customer experience, take advantage of data analytics, and gain immediate feedback. But that’s just one option among many.

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