Hyper-personalization: How banking is taking the Customer Experience to a new level

May 21, 2024

The financial industry is expanding the possibilities of hyper-personalization and highlighting it as a beacon of differentiation from the competition. Hyper-personalization transcends the traditional, product-driven banking model, offering a more nuanced understanding of customers’ life stages and mindsets thus tailoring services and products to align with pivotal moments such as marriage, graduation, or home buying. This approach has become a critical strategy for engaging and retaining customers, fitting their various financial processes and diverse needs.

Sharing more: The client’s new motto

Transitioning from a one-size-fits-all to a custom-fit banking experience necessitates a deep dive into the customer’s world. Financial institutions prioritize understanding their client’s ambitions, life moments, and financial goals, employing data analytics, automation, and keen insights into preferences. Today, they have an advantage, as there’s an exciting shift taking place: people are increasingly open to sharing their financial aspirations with banks, provided they receive personalized guidance to optimize their financial health. The rise of neo-banks like Revolut, Monzo, and Starling underscores a disruption in the banking sector, leading traditional banks to change their direction as they seek to adapt swiftly to evolving customer expectations.

A new way to cross-sell: Strategic technological edge

Given the sensitive nature of financial discussions, balancing automation with a human touch becomes paramount, ensuring personalized banking also feels personal and builds trust. This element is critical, especially for cross-selling financial products with precision, underscoring the importance of targeting customers judiciously to avoid exacerbating their debt, a strategy that allows the provision of personalized tools for better financial management, these include:

  • Predictive personalization: A game-changer, anticipating financial issues and intervening proactively to safeguard customer interests, ranging from detecting fraudulent transactions to customizing banking interfaces that reflect individual preferences, thus handing control back to customers over their financial management. At its core, personalization seeks to render banking an effortless journey tailored to individual needs. However, introducing inevitable frictions, like alerts on impending financial decisions, can foster trust by showing that banks are vigilant about their customers’ well-being.
  • Embracing open-source technology and open banking systems: Marking a significant stride towards improving customer data accuracy, thus enhancing personalization. Nevertheless, this level of data sharing requires a foundation of trust, as customers may harbor reservations about their financial activities being accessible to multiple institutions.
  • Omni-channel marketing is critical to the overall strategy, syncing behavioral analytics to ensure customers receive service through the most appropriate channels, enhancing accessibility and effectiveness.
  • The integration of automated chatbots exemplifies the blend of technology and personalization, facilitating swift responses to customer inquiries and fostering a sense of being understood personally.

Going beyond hyper-personalization

However, personalization extends beyond customer service to encompass financial literacy and maturity. It offers tailored content and tools that empower customers, especially those of high net worth, with knowledge and strategies to manage their wealth effectively. At Globant, hyper-personalization is a collaborative endeavor across various domains—data analysis, culture hacking, engineering, and design—aiming to identify and capitalize on opportunities for personalized customer engagement.

The customer-first approach is paramount, emphasizing the need to intercept and understand customer needs in real time, using tools like diary studies for deeper behavioral insights.

In essence, successful banking hinges on designing products and services that resonate with customers’ unique needs and life stages, fostering a banking experience that adds tangible value to their lives.

The advent of AI and advanced analytics has revolutionized how banks understand and engage with their customers, enabling previously unimaginable personalization and enhancing the customer experience to boost the bank’s performance significantly.

In reality, hyper-personalization is not just a trend but a necessity for banks aiming to stand out in a crowded market. By harnessing the power of data analytics, automation, and a profound understanding of customer needs, banks can offer a banking experience that is not only personalized but deeply human, building a foundation of trust and loyalty that will endure.

Learn more about how Globant is transforming the financial services industry.

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The Finance Studio provides in-depth expertise in the financial sector to help businesses reinvent themselves. We design customized transformational programs tailored to our client’s needs that boost new business models and strategies while enhancing their customers' experience.