In a world where dominant brands like Amazon and Skyscanner offer instant gratification, consumers have been craving a faster, more meaningful, and hyper-personalized experience.
“From now on, leading-edge companies—whether they sell to consumers or businesses—will find that the next competitive battleground lies in staging experiences.”
‘The Experience Economy’ authors B. Joseph Pine II and James H. Gilmore shared a futuristic thought in 1998 that is still relevant for enterprises and leaders. Keeping customers happy comes with its fair share of lucrative benefits. In 2021, research conducted by Adobe and Forrester revealed that personalized experiences can improve revenue by 1.7x year-on-year and boost lifetime customer value by 2.3 times.
Meanwhile, a lack of personalized experience can have a damaging effect and drive customers away. According to PWC research, which surveyed around 15,000 consumers, while people don’t shy away from paying more (13% to 18%) for a premium experience, one instance of an average to poor experience can lead to customer abandonment.
With meaningful personalization and superior customer experience as a priority, the banking sector is at an inflection point. The concept of ‘one-size-fits-all’ is fading into obscurity, giving way to a tailored, customer-centric approach. This evolution in banking is about stepping beyond technological advancements and understanding every customer as an individual with unique preferences. Let’s delve into the fascinating world of hyper-personalization in banking, heralding a new chapter in financial services.
The Hyper-personalization Paradigm
Meet Audrey, a young, outgoing professional with a dynamic lifestyle who dedicates her weekends to live shows, concerts, and luxe experiences around the city. However, the Londoner isn’t fond of traveling.
Audrey’s interactions with her bank have been, for the most part, one-dimensional. She often scrolls through generic banking services like travel credit cards and short-term investment plans that don’t align with her personal financial goals. However, she’s been looking for a diner’s card to match her lifestyle and secure long-term investments for her family’s future. This gap highlights a significant problem in traditional banking due to a lack of a hyper-personalization platform.
Customers like Audrey often get bombarded with targetless marketing campaigns through inconvenient channels, resulting in abandonment or frequent dropouts from the existing bank to a more involved, caring, and hyper-personalized financial institution.
With the advent of AI-driven banking solutions, banks can understand customers and build long-lasting connections. Thanks to the wealth of customer data and cutting-edge technologies like machine learning and GenAI, the end result is positive for the bank, deriving loyalty and higher customer lifetime value.
Beyond Mere Transactions
Banks generate a lot of data as customer engagement deepens and their product portfolio increases. By analyzing transactional, demographic, credit history, and interactional data, behavioral insights continue to get more accurate. A shift from mass marketing to focused, individualized strategies highlights every customer’s needs, enriching the banking experience and building trust.
If Audrey’s bank had the right tools, it could’ve identified her requirements, offered a diner credit card, and suggested long-term investment plans based on her account activity and previous investment patterns.
Bringing the Edge to Efficiency
Wondering how hyper-personalization in banking can bring about efficiency? With the integration of a low-code hyper-personalization platform, the deployment of a complex machine learning (ML) model has become more streamlined and user-friendly. The conversational interface bridges the gap between technology and business individuals, allowing banks to talk to their data in plain language. The innovation further gives them access to the results of ML algorithms in a highly interactive format. This efficiency saves time and empowers banks to be more agile and responsive to the ever-changing market dynamics.
Having an enterprise-wide capability with faster time to market can be a real game-changer. Banks can adopt the open-box approach (also known as ownership of the modeling brain) to stay ahead of the curve. By leveraging GenAI and ML, banks can segment customers more effectively based on their spending habits and lifestyle choices.
The result will be phenomenal: more effective campaigns, higher customer satisfaction, and stronger loyalty—all contributing to revenue growth.
A Path Towards Meaningful Banking
The banking revolution is set for a bright and brimming future with possibilities. The shift towards hyper-personalization platforms is a leap towards meaningful and intuitive banking that’s aligned with individual customer needs. It’s about transforming banks from mere financial institutions to partners in every customer’s unique financial journey.
