Published by Jessica Weisman-Pitts
Posted on October 31, 2022
6 min readLast updated: February 3, 2026
While sectors across the board race to perfect their personalised customer outreach, the same journey in financial services seems to lag. Despite being rich in data, funding and technologies, personalisation can often seem low on the list of priorities. So why does the financial services industry ha...
While sectors across the board race to perfect their personalised customer outreach, the same journey in financial services seems to lag. Despite being rich in data, funding and technologies, personalisation can often seem low on the list of priorities. So why does the financial services industry have so much catching up to do – and how can it get on the front foot? James Breeze, Principal Consultant for Credera UK, explains.
On paper, FS is an obvious industry to utilise customer data cleverly. It certainly has enough of it. Think of your bank, your mortgage provider, your car insurer. They know a lot about you – how much you’re spending, how regularly, and whether your income and outgoings match up.
We know that effective personalisation drives customer satisfaction, customer loyalty and upsell of additional services. So why aren’t banks and building societies making the most of it?
There are four key reasons that the finance industry finds it difficult to lead the charge when it comes to personalised customer outreach:
Risk aversion
Banks spend all day, every day dealing with peoples’ livelihoods and welfare. Handling someone’s cash is important. Throwing data around in an industry like finance could have significant ramifications – and as a result, the power and control that risk aversion has over a financial services business is a real brake on progressive customer outreach.
The dial is turned towards aversion and therefore little regard is paid to the potential. That’s understandable, but also a missed opportunity.
Working in silos
Financial services tend to be structured by channels and by products – a home insurance team, a car insurance team, a mortgage team, a personal savings team… these categories don’t necessarily and operationally make sense together. And so, when two teams (or 200 teams) under the same roof are working separately, it becomes difficult to stitch knowledge and processes together seamlessly.
You might be one consumer whose engagement spans several different products or departments, but something as seemingly insignificant as a space in a postcode or the inclusion of a middle initial can cast doubt on that fact. Yet that’s not an easy problem to fix, as merging records would have enormous data privacy and regulation impacts.
Traditionalism
There is a perception that many people rely on the reassurance of an ‘in-person’ experience for their banking, where they might not in other areas of their lives.
While the general assumption is that ‘older’ customers are wary of digital services, it’s an assumption we must start to challenge more and more. In five years, 50-year-olds will have had an email address since their teens. Plenty of people in their 80s have smartphones – in fact, 66% of the entire global population do. Our expectation of digital uptake and customer communication needs to evolve as quickly as its users.
Regardless of your personal stance on digital versus physical nowadays, it’s undeniable that banking traditionally relied on in-person interaction. That may have started to change years ago, but that original position caused a lag in organisations always having the right data, in the right place and at the right time.
Infrastructure
Due to the nature of the highly specialised individual products offered by banks, very bespoke IT infrastructure follows suit. This tends to silo departments and accentuate tech issues. The systems are expensive to maintain, but even more expensive to modernise.
It’s easy to see how banking has fallen behind when it comes to matters of tailored outreach – but there’s a huge opportunity for these organisations to enhance their offering by focusing on their data and how it’s used.
So how and why should financial institutions focus on data-driven personalisation?
It’s worth noting that banking traditionally scores quite low in consumer trust polls. The stakes are high – it’s people’s money, it’s important and most consumers are inherently a little guarded – so trust between an individual and their FS provider doesn’t come naturally. A good personalisation strategy is therefore one that builds that trust. That might be a journey which starts with a softer approach: “We’re using your data for this purpose – is that okay?”
As you strengthen trust with your customer, you can start to think about demonstrating a fair value exchange – use of their data offers a seamless customer experience, and their necessary interactions with their provider don’t have to be such a burden as a result. Enhanced use of data to personalise services can, in time, create a symbiotic relationship of mutual benefit to financial services
providers and consumers.
There’s a whole swathe of benefits that can be derived from getting it right. Having a fabulous end-to-end customer journey is brilliant for retention. For a large organisation with multiple strings to its bow, the ideal customer is one that has several products with that one institution, but that switches between transactions with them seamlessly.
Relevancy and timeliness don’t just help with existing customer retention, but with cross-selling, too. Knowing someone took out a mortgage a year ago and therefore may need to renew their house insurance might sound simple enough, but it can have an impactful result. People crave convenience, and tailored content can help with that.
Of course, financial services must continue to walk the tightrope of regulation – the industry is risk averse for good reason. But within those rules if you can present five relevant options, rather than 500 available products, based on what you know about the customer and their spending habits, you’re likely to continue to drive retention, customer satisfaction and additional sales.
The personal relationship between financial provider and consumer is an increasingly modern issue which requires increasingly modern solutions. Consumers in every demographic group are digitally-savvy, reliant on financial services and looking for ways to make their busy lives easier and more convenient. The opportunity to offer a holistic, data-driven solution to them is there for the taking, if only for providers who are brave enough to take the leap. There’s no need to start from scratch or go it alone – reaching out to expert advisers could help you navigate choppy waters. Putting your faith in your data could be the best thing you ever do for your customer relations.
Personalization in financial services refers to tailoring products and communications to meet the specific needs and preferences of individual customers, enhancing their overall experience.
Risk aversion is the tendency to prefer certainty and avoid risk, particularly in financial decisions, which can impact how financial institutions engage with customers.
Data-driven personalization involves using customer data and analytics to create tailored experiences and recommendations, improving customer satisfaction and loyalty.
Infrastructure in financial services refers to the underlying systems and technologies that support financial operations, including IT systems, processes, and regulatory frameworks.
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