Banks must provide personalized experiences to keep pace with emerging competitors

By Hannah Plotkin, Senior Manager, CRM Solutions at Amperity

As banks and financial institutions adapted to the digital age, they were faced with the decision of how to use, store and protect the mountains of customer data being created by their new online tools. With banks adding new technologies organically, data silos naturally began to develop between new tools and systems. A bank’s number one goal is to keep their customers’ personal information and money secure, so banks have been reluctant to unify all of their customer data in one place for fear of exposing a potential weakness within their internal architecture. This poses a significant challenge to developers who are looking to build innovative solutions that will improve the customer experience.

Why is your bank still sending you marketing messages to download an app you use on a daily basis? Why can’t your customer service representative find relevant account information when you call in to open a new account or dispute a charge? These customer experience glitches are symptomatic of a larger problem: banking systems are unable to provide personalized experiences because they don’t have a unified view of customer data.

New fintech solutions are emerging on a daily basis, making it easy and engaging for consumers to store their savings, trade stocks, and borrow money. Industry newcomers have the benefit of building their systems from scratch to capitalize on the opportunity to connect anonymized traffic to known customers and derive the insights needed to offer targeted services and recommendations to their customers. 

For banks to remain relevant in the future, they will need to deliver smooth, personalized experiences based on a comprehensive understanding of their customers while still maintaining the highest standards of security. Providing these experiences requires banks to unify their customer data and be able to connect the dots between disparate datasets; generate insights and intelligence; and then use those insights across downstream systems. One element of this process isn’t enough — banks must be able to do all three.

Few banks are effective at building unified customer profiles

Last November, research by Forrester Consulting found that just 14% of consumers believed banks and financial institutions were “extremely effective” at providing personalized customer experiences. In contrast, 25% of customers found retailers to be extremely effective at personalization. While leading brands provide shoppers with targeted services and offers, banks are seen to be lagging behind with outmoded approaches and stilted experiences.

Banks must design services around customer behavior and create the types of experiences that drive loyalty. To achieve this, banks will need to fundamentally change the systems and architecture governing their customer data.

A customer-first mindset requires new thinking about data architecture

In order to improve the customer experience, banks need to first remove silos and bring down walls between their traditional lines of business. When banks rely on the architectures and approaches that they used before the digital revolution, they are limited in their ability to fully leverage customer data.

Today’s banks have access to a wide range of tools that handle customer data and the customer experience. Many contemporary data management and activation tools are designed to be modular components of an institution’s larger tech stack. These tools can quickly and easily integrate with existing systems, allowing banks to upgrade their technology without having to rip and replace their current tools. By incorporating strict regulatory compliance and information security protocols from the beginning, these tools also offer banks an easier solution to bridging siloed departments than attempting to integrate the underlying systems.

Banks can successfully adapt a new data architecture for customer experiences by starting with the problems they want to solve. If a bank wants to ensure that its customer support reps understand the customer’s journey before they call in, what tools and systems need to be in place to connect the relevant data? What data analysis is required to serve each customer with a personalized account offer? Once the goals are clear, it’s easy to find and integrate the tools needed to reach them.

Banks are running out of time to adopt a unified customer view

Legacy financial institutions face tremendous pressure from agile fintech competitors. According to TechCrunch’s 2021 Matrix Fintech Index, the fintech industry outperformed the market as a whole by three times in 2021. With young customers ready and willing to adopt new solutions for mobile payments and digital services, banks must develop new processes to provide seamless experiences in order to remain relevant. 

Financial institutions that move too slowly risk falling dangerously behind. As a new era of disruptive financial technology emerges, banks will be better positioned if they look at where customer expectations are headed and attempt to meet them instead of simply trying to keep up with industry peers. The faster these organizations integrate their customer data and put it to use, the more they can satisfy the needs of their customer base, build stronger brand loyalty and separate themselves from the competition.

The future of banking: wherever and whenever you need

The personal banking landscape is shifting and digitalizing at a pace that is unlikely to slow down. Consumer expectations have evolved, and financial institutions must develop the data-backed, future-proof cross-channel and cross-platform experiences that their customers prefer. While it’s true the digital momentum shined a bright light on the importance of harnessing the power of first-party data, the task to put it to use is not easy. With the right customer data tools, banks can make sense of scattered data and turn it into valuable insights to engage customers and grow value.