By Simon Rodway, Entersekt’s VP of solutions explains the balance between give and take Financial Institutions must make in order to provide valuable services to customers

Consumers have grown accustomed to personalised content and messaging; in fact, they’ve come to expect it. Demand for personally tailored services across all industries grows unabated, and advances in technology have enabled companies to give consumers what they want. And for companies, offering tailored content is a way to break through the noise and be heard above the competition. A win-win situation, right?

The personal data tug-of-war

To offer truly personal experiences and create a sense of connection with consumers, financial institutions (FIs) need data. And the more data they can collect about their consumers – within the realms of privacy legislation of course – the better able they are to do this. However, while consumers want personalised services, data privacy scandals and data breaches have sown mistrust and suspicion. Most consumers know that data is being collected about their tastes, preferences and whereabouts, but are unsure of exactly what this means in terms of their rights, what data is being used and for what purpose, and by whom. Additionally, government legislation for increased privacy and data controls – such as the General Data Protection Regulation in Europe which has just had its second birthday – have further complicated financial institutions’ customer-first strategies.

It’s a fine line

With a careful balancing act, this data tug-of-war could result in an outcome that all parties are happy with. Take for instance a study conducted by Accenture, which found that 80% of people would be willing to share their data in return for personalised and convenient services. And while it’s true that different demographics vary in their willingness to share data, modern technology allows FIs to give consumers the choice and control to drive their own personalisation experiences.

This option of choice is an important point for FIs to heed because there’s a fine line between a welcome recommendation and a brand experience that crosses the line. A 2016 Accenture study reported that almost two-thirds of consumers who reported a brand experience that was too personal or invasive did so “because the brand had information about the consumer that they didn’t share knowingly or directly, such as a recommendation based on a purchase they made with a different business.” “The key is to bring value to customers and keep data use in context,” says Penny Gillespie, VP analyst at Gartner.

Adding the value

Customisation is the key here. It’s a way to balance the fine line between privacy and personalisation because it allows the consumer to control the interaction. The aim is to make it easy for a customer to control how their FI uses their data. Imagine you’re a keen golfer and generally shop at the same golfing chain. One day, you get a message from your FI. “We’ve noticed that you regularly shop at Golfers R Us. Did you know that you fall into their Gold shopper category, which would qualify you for extra discounts? Would you like us to let them know?” This type of flexible responsive messaging engages the customer, developing a relationship built on trust.

Some forward-thinking organisations are already using customer data sets to deepen the personalisation experience by offering apps that help consumers manage money or insurance products that are priced based on behavior, for example. According to Gartner, “organisations that combine identity data with behavioral data will outpace those that don’t.”

Over time, and as consumers continue to expect greater innovation in return for their data, it’s likely that we’ll see an increase in integrated solutions that combine industries such as finance, insurance, and healthcare. You only need to look at the Swagbucks rewards program to see how effective this can be. The model allows consumers to decide how far they want to be immersed in the personalisation experience, i.e. how much data they feel comfortable sharing. The more a consumer gives, the more rewards they receive from participating partners. It’s a quid pro quo agreement admittedly, but it has the effect of assuring consumers that the data being gathered about them literally adds value to their lives.

Simplify and enhance, intelligently

To successfully address the privacy paradox, FIs need a more intelligent approach to technology and user experience; one that focuses on customer needs and preferences, and which gives consumers more control over their financial wellness. One way to achieve this is by using the mobile – a device consumers always have with them. It provides a reliable, highly personal channel that cuts through the clamor of daily digital life to engage customers in secure two-way communication. It integrates seamlessly with the self-service functionality of a banking app, and with intuitive and simple dialogue, it gives customers the opportunity to decide on the type of personalisation they expect (and agree to) and take charge of their own financial journeys.

Tying it all together

In terms of adding value, a very specific advantage that FIs have over non-traditional competitors is that consumers generally trust them with their financial well-being. However, the time for FIs to rest on their laurels –especially when it comes to data security – is over.

Indeed, we’ve spoken about personalisation and integrated solutions, but robust data security completes the value-adding trifecta. Without data security, the value of these services is completely undermined, as consumers have to feel confident in this aspect in order for a programme to be successful.

In fact, many consumers believe that they should have some control over their data security. In a recent survey conducted with PYMNTS.com, we found that 71.2% of respondents feel the data security of their mobile banking apps would be stronger – and more than half felt that the risk for fraudulent transactions would be lower – if they had more control, and more options for control.

This presents an opportunity for financial institutions. By leveraging the trust that consumers have in them, they can offer consumers more of what they demand – in terms of both greater control over security measures and personalisation – all while providing them with great experience regardless of the channel they prefer to interact through. It’s all about the bigger picture – offering customers the peace of mind that comes with knowing they are protected and their privacy is intact even as they reap the benefits of personalised experiences that let them take control.