Meeting Customer Demand for a Tailored Banking Experience

Personalization is more than just using a customer's name in an email. Banking customers expect products and experiences to be tailored to them, not designed for the mass market. Personalization in banking lags behind the retail, media and technology industries, but the gap can be closed by leveraging existing data and resources.

Personalization in banking is not a new concept, yet most institutions haven’t cracked the code.

According to, the term personalization has two definitions: The act or process of marking with one’s initials, name or monogram; or the act or process of tailoring something to meet an individual’s specifications, needs or preferences.

Many organizations think the first definition is sufficient, but in reality it’s a basic expectation that some banks nevertheless get wrong. For example, a bank website or mobile app that greets the customer with “Good Morning, Daniel” may in fact be irritating to a person who prefers to be called “Dan” even though the bank thinks it’s “personalizing.”

And we’ve all received emails that begin with “Dear {FIRSTNAME},” which is simply a bad look for the institution and demonstrates to the customer that so-called personalization is a “check-the-box” activity rather than an authentic connection.

Financial institutions have so much customer data available that they should be able to do better than a couple of database variables like {FIRSTNAME} and {LASTNAME}.

For example, recognizing a customer’s birthday, anniversary, wedding, new child, new pet or other important life and career milestones is a simple, inexpensive and personalized way to show interest and caring. It improves the customer experience and engenders loyalty at almost no cost.

Even offering a lollipop for kids or a biscuit for dogs can make a customer smile. After all, the quickest way to someone’s heart is through their children or pets.

Banks Must Move Beyond the Unremarkable

The second definition of personalization is what creates a remarkable customer experience — literally, one that is worthy of remark. Personalized customer experiences yield customers who stay longer, spend (or borrow) more and refer friends, family and coworkers.

Today’s customers are bypassing mass-produced products in favor of customized, handmade, one-of-a-kind products. They want products, services and experiences, designed for them, not for everyone.

For example, Discover Card offers 159 card designs — including all sorts of sports, pets, flowers and monograms — so that each cardmember can personalize their experience with their selection. Newer offerings include “Handful of Color,” a card displaying hands of different skin colors, a rainbow-themed gay pride card and even one in Braille for blind and vision-impaired cardmembers.

Co-branded credit cards represent another personalization opportunity, offering customers rewards and benefits based on an existing affiliation with an airline or retailer.

Open Minded:

Nearly three quarters of consumers are willing to share their data to receive personalized customer benefits.

According to The 2022 State of CX Report by GetFeedback, a personalized customer experience is “building products, services, and interactions –– obtained from customer data points like purchase history, industry, location, etc. –– that meet your customer’s unique and individual expectations, preferences, and requirements.”

And yet, as a study by Forrester and Blend found, “financial institutions have fallen behind other industries in effective personalization.”

Specifically, when asked about the effectiveness of personalization programs in various industries, customers ranked retailers (such as Target, Walmart, and Amazon), media companies (Netflix, Disney, and Spotify), and technology companies (Apple, Meta, and Google) ahead of banks or financial institutions.

Fully 72% of consumers agreed or strongly agreed with the statement: “I think product offers are more valuable when they are tailored to my personal needs,” while 55% said “Banks should make it easier to find and shop for financial products” and 50% said “I wish my bank was more proactive about giving me relevant financial information and advice.”

Company-Centric Versus Customer-Centric

During the early days of the Covid-19 pandemic, consumers were inundated with urgent email announcements about safety measures from every company that had their email address on file. Most of them said essentially the same thing, trumpeting “enhanced cleaning procedures” and sending people to the Centers for Disease Control and Prevention (CDC) website.

Customers' View:

Customers don’t care which bank department handles what. They look at the institution as a single entity, and expect every employee to be looking out for them.

Charles Schwab took a completely different approach, sending an email that begin with: “At Schwab, we have a deep and abiding belief in seeing the world ‘through clients’ eyes’.” It acknowledged “so much uncertainty in the financial markets and concerns about Covid-19” and then provided resources — both self-service and through human interaction — that investors could use during uncertain times.

“Despite market turbulence and disruptions in daily life,” the e-mail concluded, “we’re confident in our ability to be here for you, whatever comes our way.”

This is the difference between a company-centric organization and a customer-centric one.

Customers don’t care about organization charts or which department handles what. They look at a financial institution as a single entity, and expect that every employee is looking out for them.

By simply looking at business issues through a customer lens, banks and financial institutions can make better decisions that benefit both the business and the customer.

McKinsey found that banks that put “customer value at the center of personalization efforts” have generated 5% to 15% higher revenues from marketing campaigns and have halved or quartered their time to market.

For example, instead of sales messaging such as “Try our zero percent introductory rate,” successful institutions focused on journey-based communications such as “Here’s how to make your holiday stress free.” One is trying to compete on price (a nearly impossible game to play) while the other is demonstrating a true understanding of the customer’s state of mind.

McKinsey further found that the main hurdles banks face to successful personalization at scale include: inconsistent customer data, substandard analytics capabilities, poor campaign integration and tracking and inadequate usage of technology such as artificial intelligence and machine learning.

A Targeted Experience Will Free Up Customer Data

So what does personalization in banking actually look like? Usually, it begins with an agreement with the customer to trade privacy (in the form of their data) for a more targeted, convenient experience.

In fact, 73% of consumers today are “willing to share some, most, or all of their data in order to receive personalized customer benefits,” according to a study by American Banker.

  • What consumers want most, according to the study, are personalized:Loyalty programs and cashback rewards.
  • Savings and investing strategy recommendations to achieve financial goals.
  • Interest rates to help them save.
  • Digital dashboards, alerts and monitoring for financial accounts.
  • Promotional offers and discounts from partner organizations.

Younger consumers seem to be even more interested in personalization than older generations, so demand is only expected to increase over time. Customers also crave human-to-human interactions.

Two Financial Services Examples of Personalization

U.S. Bank installed a cobrowse solution to allow customers to connect digitally with a human who can help them navigate opening an account, depositing a check, and other banking transactions. The result brings a feeling of being in the bank branch without having to leave the computer or mobile device. Similarly, Intuit offers in-app guidance to customers needing help completing their tax returns — an otherwise frustrating experience, to say the least.

Unexpected Benefit:

When a bank listens to customer feedback and reverses a bad decision, it creates more loyalty than if they hadn’t made the bad decision in the first place.

Intuit also deftly responded to a business decision that perhaps wasn’t as customer-centric as intended. Customers revolted after the company announced in the summer of 2022 that it was sunsetting the ItsDeductible program, a supplemental service that helps to track charitable donations for tax purposes. Rather than digging in its heels, though, Intuit soon reversed course and decided to save ItsDeductible.

“Based on your feedback, we are happy to share that we have revised our decision and will continue to support ItsDeductible,” said an email to customers about a month after an initial email explaining the suspension of the product.

Intuit made a mistake, but was willing to listen to customer feedback and reverse an unpopular decision. When companies listen to their customers, they can actually create more loyalty than if they hadn’t made the bad decision in the first place.

Banks can also learn from other industries that successfully employ personalization tactics. For example:

  • Utility companies such as Duke Energy and ComEd proactively warn customers when a storm is coming and try to comfort them by letting them know the company will be on the case immediately if there is a power outage. This increases customer trust and loyalty and also reduces customer service calls when the power does go out.
  • A BMW dealership outside of Chicago has a digital sign that reads a car’s license plate as it enters the service area and displays a welcome sign with the customer’s name on it. Who doesn’t like seeing their name in lights?
  • Starbucks presents personalized offers to customers in its mobile app based on previous purchases. Grocery stores often do the same with tailored coupons.

About the author: Dan Gingiss, presented here by Glance, is an international keynote speaker and coach who believes that a remarkable customer experience is your best sales and marketing strategy. His 20-year professional career included leadership positions at McDonald’s, Discover and Humana. He is the author of two books, The Experience Maker and Winning at Social Customer Care.

Glance provides personal, human-to-human customer experience in digital environments. Glance’s cobrowse, screen share, mobile app share and video solutions help increase customer satisfaction, ensure brand loyalty and create new revenue.

This article was originally published on . All content © 2024 by The Financial Brand and may not be reproduced by any means without permission.