You open Spotify, and there’s a custom playlist for your listening pleasure. Go to Amazon, and there’s a myriad of product suggestions based on your previous purchases. Head over to Netflix, and it’s already offering up your next favourite film. Everywhere in our data-driven, digital world is becoming more personalized. But where does banking fit into all this?
Once upon a time, the only personalization in banking was location-influenced. You might have a local community bank or large bank branch that knew your investment habits and saving goals and could recommend products suitable to your portfolio. At least, that was the ideal. Most people just used the branch closest to them, and would only change when they moved.
Now, in a world driven by digital transformation (including the revolutionary new Open Banking ecosystem) heretofore unknown levels of personalization are becoming available to customers looking to access a custom-tailored experience they’ve grown used to across a panoply of platforms.
But what exactly does personalization mean for banks and their clients? And does its impact justify the expense incurred to retrofit the existing tech? Here’s what you need to know:
What does Personalized Banking Mean?
In a nutshell, personalized banking describes a process by which financial institutions craft their promotions, campaigns and products in such a way as to appeal to small (or even individual) segments of the markets. Rather than a shotgun approach, creating a promotion that appeals generally, personalized banking means customers will be accessing products and services that (they at least feel) are built just for them.
This, ultimately, requires a data-influenced approach. Before a bank can offer a custom-tailored tailored experience, they need to actually know the measurements of their customers. Like Amazon, Google and Facebook are able to develop unique experiences based on the interactions they have with their clients, banks will need to lean on the information they have to build these relationship experiences. Luckily, no companies on earth have better or more granular data than banks.
Personalized banking means building better banking relationships. It means attracting new customers and retaining old ones. It means accepting the paradigm shift has already occured and taking every opportunity to remain relevant.
How to Achieve High Levels of Personalization
Massive tech companies like Apple are emerging quickly — and powerfully — onto the financial scene. Combined with the threat of digital-only challenger banks, traditional financial institutions have to scramble to adapt and maintain their competitive edge.
While at one time, FinTech companies were seen as antagonistic towards bank dominance on the financial scene, now they’re more and more frequently viewed as a life raft. Most FinTechs have realized that going head-to-head with banks wasn’t going to be long-term sustainable. And going head to head with the tech giants? Laughable. But working with the banks, becoming partners, and helping the banks get a leg up on technology-driven solutions — that is a far more profitable proposition.
Many FinTechs, including Zafin, have built their brand on offering a customer-centric banking experience. Zafin’s technology is designed to build, maintain and nurture relationships by creating a personalized banking experience with individualized pricing. Banks can easily craft promotions and develop banking products that are designed to appeal directly to a specific customer segment.
By managing rates, fees and points, and using predictive analytics to understand your customers better, your bank can get a leg up on the shifting industry. Want to learn more? Get in touch with Zafin today!
Zafin (@zafin) is a leading financial technology provider that enables banks to form richer, more personalized client relationships. Built from the ground up for financial services, its platform empowers banks to enhance revenue and operational efficiency. Founded in 2002, Zafin sits among North America’s top FinTech companies, and is trusted by retail and corporate units at some of the largest banks worldwide. Headquartered in Toronto with global offices, Zafin has a proven track record with a 100 percent client retention rate as validation.
Cam is the Product Marketing Strategist at Zafin. With a background in journalism and a passion for blogging, Cam strives to tell compelling digital stories. At Zafin he will share the latest trends and news in the FinTech world, and share Zafin’s role as leader in the industry. Follow him on Twitter @CamSmoth