The One Big Thing Missing from Modern Digital Banking 

By Aaron Sun, Product Marketing Manager, Redis Labs

It may not have always seemed that way, but many banks were early adopters of technologies that enabled the development of digital banking services. By 2000, a majority of banks in advanced economies offered some form of online banking, although, by modern standards, these services were slow and very limited. Today, however, many digital banking services are much faster, more secure, and increasingly sophisticated, with payment and other banking functions instantly accessible via a huge range of connected devices. These capabilities are now complemented by a powerful array of other online financial service offerings, including savings, investments, mortgages, insurance, and account aggregation.

The missing puzzle piece: personalisation

That sounds great, right? But one critical element of the ideal digital banking service is still too often missing is genuine personalisation. Banks may offer increasingly well-crafted products and useful services, but in many cases the customer experience fails to reflect an individual’s circumstances, choices, or previous interactions with the bank. Banks still have a long way to go in order to tailor products, services, and customer interactions to match their users’ specific needs and preferences.

That is a real problem in a world where software companies are disrupting industry after industry, in large part because they offer more personalised services than their legacy counterparts. Growing numbers of consumers are now accustomed to interacting with a wide variety of vendors offering fast and reliable online services that incorporate some degree of personalisation, from retailers to on-demand streaming services. In that context, consumers may find it difficult to understand why their bank cannot provide the same level of customisation. While other businesses treat consumers as individuals and not account numbers, too many banks still make their customers feel more like the latter.

Rethink your data layer strategy to enable personalisation

Obviously, banks and financial service institutions have access to a rich trove of customer data, and it appears the banks and fintech companies using this data to successfully personalise their digital services enjoy significant commercial benefits. In 2019, research by KPMG based on the views of 84,000 consumers in 20 countries, revealed a clear correlation between personalisation and brand loyalty in 18 of those markets, including the U.S., the UK, Australia, Brazil, France, Germany, and Italy. Consumers consistently awarded higher ratings to banks with the best personalisation capabilities.

But, banks can build desirable personalised services only if they rethink their data layer strategies.

Financial institutions need data infrastructures able to provide the power, speed, flexibility, and scalability to draw useful information out of enormous volumes of customer data—and turn that information into personalised offers and interactions. Achieving this for a massive customer base requires the ability to respond quickly to very large numbers of processing requests.

So, what must financial institutions do in order to rethink their data layer strategies to enable personalisation and reap its benefits?

Delivering an effective digital banking service incorporating personalisation depends, above all, on the ability to process and analyse very large datasets at very high speed. New entrants in the banking sector have the advantage of being able to build such infrastructures from scratch in the cloud. But banks saddled with legacy database architectures that may have been assembled on a piecemeal basis over many years will struggle to deliver the level of performance required. Many existing banks will need to significantly, or completely, rebuild their data layer to support a genuinely personalised digital banking service.

When re-building this layer, banks need to look at in-memory databases which can deliver multiple data models. Whether it’s used as a scalable cache or session store for user profiles and digital identities for customers or updated in real-time to deliver personalisation consistently across service channels, the solution will provide the basis of a full digital banking service.

Ultimately, banks need flexible and scalable data infrastructure as only the fastest, most robust and reliable data layer technologies can transform raw customer data into the insights that will fuel growth in market share and profitability in the digital banking sector. Not only this, but financial service organisations will further benefit from a data layer capable of supporting personalised digital banking services, as it has the ability to also power other valuable real-time use cases, such as anti-fraud measures, through detection of unusual, uncharacteristic customer behaviour, and many more.