Banks are slowly starting to disentangle themselves from their legacy technology as they embrace digital transformation, yet more work needs to be done to truly take their customer experience into the 21st century. In the last in a series of 10x Banking webinars on the trends that are reshaping the financial industry, 10x’s Product Manager for Core Banking Sophie Tollet was joined by 10x Product Owner George Broom to discuss how banks can hyper-personalize their services and improve the overall customer experience.
Here are five takeaways from the webinar:
Customers are increasingly expecting their banks to provide hyper-personalized experiences that are specifically tailored to them and which add value to their lives in much the same way as other services that have set the benchmark for digital innovation (such as Netflix and Spotify). “People expect you to know their needs, but they also expect you to know what their future needs might be and predict these things and make relevant recommendations for them,” says Broom. “So it’s trying to anticipate those and bring those into your financial proposition—that’s not necessarily what we see as market standard at the moment.”
Being able to offer hyper-personalized banking experiences means being able to leverage customer data in real time—something that is not possible with legacy technology. “Historically, banks have been built using different platforms to do different products and different things,” says Broom. The problem with that approach is a lack of integration. That makes it difficult to get a holistic view of a customer and their activity and transactions data in real time in a way that banks can then harness and generate actionable insights from, Broom says.
By using data to truly understand the customer, banks can start to offer products and services their customers need, at the point when they actually need them. “That’s how you make customers start to really trust you and have that emotional connection,” says Broom. While customers generally trust banks to keep their money safe, there is not always the same level of trust when it comes to acting in their best interest. “Having the customer’s interests at heart isn’t always clear and obvious, but via hyper-personalization you can make it really clear to the customer that their needs are in your focus, and you understand them,” Broom says.
Given that regulators expect banks to put customers at the heart of their decision-making and ensure customers are always treated fairly, data that is used to provide hyper-personalized services can better evidence to regulators how customer recommendations were made. Because those recommendations are based on a customer’s individual behavior and circumstances, banks can more easily demonstrate that their decision-making is fair and in that particular customer’s best interest, says Tollet.
Customer data can also be used to help create new products faster than ever before. “Using and harnessing that data in the product development process really creates a competitive advantage,” says Broom. “Based on all the data we have and which is readily available, I can simulate the performance of that data and understand what that means from a commercial perspective and what that means from a customer impact perspective. And I can do that in days.” That means banks can launch products at a much faster clip, giving customers access to new services when they need them—not two years down the line. “It opens up the doors to true innovation,” Broom adds.
Watch here to learn more about how hyper-personalization can help your bank enhance the customer experience.