Consumers Want Personalized Experiences
A few years ago, an article in The Financial Brand highlighted the need for bankers to begin to think and act like retailers. The article What Bankers Can Learn From The Retail Industry is now very dated since those bankers not yet convinced of the need to think more like Apple, Amazon, Nordstroms, Uber, et al. are now out of time to get on board.
More recently in his article Lack of Personalization Puts Banks at Odds with Consumer Expectations, Jim Marous asserted that without personalization at scale, financial institutions were facing an exodus of customers who would go elsewhere to have their expectations met. According to Marous:
“Personalization at scale can positively impact both short-term and long-term value for financial institutions – making marketing more efficient and providing an uplift in revenue and share of wallet. Unfortunately, while most bankers say they recognize the need and potential for personalization, less than 20% say they are doing a good job at it. For many financial institutions, personalization at scale still presents a conundrum.”
Less than 20% of bankers believe they are doing a good job at personalization.
The conundrum is largely based on the data puzzle that has been part of banking since the smartphone was introduced. Too many bankers don’t know how to access the multi-faceted data streams that flow into and within their institutions. Silos are still largely present in their IT landscapes creating data “jails” that make it hard to assemble all the data in one place. Plus, even if the data is assembled, there is the conversion of these data streams into actionable information that can be monetized in the selling of more products, the creation of loyalty and more.
At this point, the struggle becomes a technical one. Unlocking mountains of data that can be used to predict the needs and wants of customers and members in real-time is something humans are not built to do and are given to all sorts of biases, such as taking shortcuts to revert to patterns that have served us well in the past. Artificial Intelligence is an answer to unlocking the value in the data. Still, for some bankers, that topic may be more confusing than even getting at the data they have amassed in their operations.
AI doesn’t have to be confusing, but the hype some Twitter stars and LinkedIn mavens have gone for vies and likes more than providing factual and helpful info that can be applied by bankers and many other professional groups. The fact is, AI can be applied easily and without the need for a complex, resource-draining project or hiring people with special talents. Further, it is within the budget of community financial institutions. This is a game changer as even the biggest banks struggle leveraging data and applying AI.