

Rami Cassis, CEO, Fintilect
By Rami Cassis, CEO, Fintilect
There was a time when, if we wanted to open a bank account, or apply for a mortgage, we would visit a high street bank or building society branch, clutching reams of paper identification, to meet with the manager of that branch, or one of their staff.
Indeed, the chances are that the bank manager, or one of the personal or business banking team, would know their customers by sight, possessing intricate, first-hand knowledge about their specific financial and lifestyle aspirations.
However, thanks to the rise of “anonymous” internet banking, coupled with the ongoing closure of many branches, these personal relationships are becoming largely consigned to the history books.
The digital transformation that we have witnessed to date has come with some dramatic side effects that have caused celebration in some quarters – but a substantial degree of angst in others.
The removal of the ‘personal touch’ of speaking to a human was largely a trade-off against the perceived benefits of instant financial gratification and the ability to manage finances 24/7 using digital methods. The ability to use smartphone apps or a laptop screen to carry out all aspects of the financial services journey seemed to trump anything else on offer for many people.
In our haste for automation and 24/7 functionality, are financial services providers at risk of forgetting the importance of understanding customers as unique individuals?
Hyper personalization: Why is it important?
Research clearly shows that consumers expect to be known, understood, and to get exactly what they need from their bank, building society, credit union or other financial institution, when they need it, on their terms, wherever they happen to be.
One clear example is provided by McKinsey, stating that over 70% of consumers expect personalization and get annoyed when it doesn’t manifest. Another piece of research, this time by Twilo, is clear in its conclusion that 56% say a personalized experience would motivate them to become repeat buyers – a seven per cent increase compared to 2022.
Hyper-personalization is becoming not just important, but vital.
Consumers are increasingly expecting it. If a bank, building society, credit union or other provider does not provide at least some form of personalization to show that they value each customer as an individual, they will certainly be on the back foot as the need for hyper-personalization powers on into the future.
Now that the bank managers of old who personally knew their customers are vanishing, how can this be achieved?
Hyper-personalization: How do we achieve it?
The key to hyper-personalization is not just looking at a customer’s transactions and demographic data. In fact, this has been tried and tested before, with only limited success. What will enable a provider to truly get into the mind set of their customers is by finding out more about their goals, aspirations, their lifestyle and motivations.
Such digital experiences don’t just need to create better marketing content, they need to expand to ask more questions, gather more feedback, and build up a picture of their users.
If a financial services provider relies on simply adding additional features and an engine to process additional customer data, success will be limited. Instead, providers should tackle the task holistically. To do this, they need to enter a new, second phase, or Digital Transformation 2.0. by combining machine learning, data analytics and behavioral science.
This is achieved by building on the established tools that exist today, be they digital banking, smartphone apps, blockchain or API integration, and using them alongside a highly personalized experience tailored for the individual, which will evoke those memories of walking into a local branch and having a relationship with the staff and bank manager.
Using AI-driven analytics.
Today’s digitally driven age provides somewhat of a juxtaposition when it comes to providing an opportunity for financial services providers to approach new customers, or service existing ones.
On the one hand, the mass adoption of online banking means that branch visits are becoming increasingly uncommon. However, on the other hand, the digital footprint left by today’s customers means there is a raft of data that can be analysed to deliver hyper-personalized sales and marketing campaigns at scale.
By plugging in a sophisticated, personal data protection compliant AI tool, a bank, credit union or building society can turn the few and basic touchpoints it has on its clients’ lives, such as age, gender, geographical location, and nationality, into a rich source of intelligence. AI can analyse detailed behaviours such as the purchases their clients are making, what time they are accessing emails and even the tools they are using, such as a laptop or a smartphone.
The level of granularity is such that AI tools today can pinpoint who is likely to be an animal lover by the frequency they are buying petfood or visiting a pet superstore. Those who have gym memberships or pay football club subscriptions are likely to be fitness or sports fanatics, and people who regularly spend money on gaming and computer accessories are likely to enjoy living in augmented reality.
The availability of such rich insights opens the possibility for financial providers to make a very specific sales pitch based around the characteristics of an existing, or potential client. A specific retirement savings plan might be the same – it could be a straightforward investment or savings product. However, a targeted approach to presenting the correct product in the first place, in addition to presenting the product in the right way for specific people, will immediately ensure it appeals to an increased number.
For thrill seekers, a bank might emphasise the importance of saving for an active later life filled with white-knuckle adrenaline-filled pastimes. However, for the more reserved, a gentler approach may resonate, highlighting the need to plan to enjoy gentler activities such as gardening and enjoying a relaxed pace of life.
Although the product is the same, the route taken to approach different people will be much more tailored thanks to AI, which is likely to result in better outcomes.
Likewise, AI can tell institutions when to send out messages, dependent on the habits of different groups. Some might prefer an email early in the morning, others might be more receptive late at night. Sophisticated AI engines will do this automatically.
The possibilities are endless. AI takes out the labour-intensive process of trawling through customers’ data and can analyse reams of data, covering many millions of customers, incredibly swiftly.
Conclusion
The future of financial services is increasingly becoming defined by hyper-personalization tools enabling providers to truly understand what their customers need.
This empathy and ability to speak the language of their customers reflects well, translating into deeper, much more fulfilling relationships for all concerned, an assertion supported by the many surveys into the topic.
As stated earlier, there was a time when the personal customer relationships were held by bank managers and their staff. Thanks to technology, these traditional relationships can be harnessed into something even better and even stronger for the 21st century and beyond.