Using hyper-personalisation to enhance digital banking

Think about your existing digital banking experiences: Mobile, desktop or whispering to Alexa to check a balance (Amazon Echo banking). Chances are; you will have noticed how these digital experiences do not go much beyond facilitating transactional activities between you and your bank.

These banking experiences have not been designed to build relationships with customers; through personalised content, products, services and marketing. They fail to emulate softer experiences of person-to-person banking.

At the moment, enhanced digital banking experiences are rare, and banks are losing out.

Using hyper-personalisation, a bank can enhance these transactional relationships and add a layer of enrichment that is truly valuable and meaningful. The upside to a bank is enormous; the potential for much more productive relationships with customers, and a higher lifetime value. And if the bank gets it right, the customer benefits are many; being more informed, quicker access to advice, more appropriate products and services.

Companies that come close

BBVA

Multinational bank BBVA has an exciting insight platform within their internet banking that looks at customer transactional behaviour and gives personalised advice, e.g. how long will I be able to last without income while maintaining current spending habits (Covid19 has probably increased the number of people asking these sort of questions, and banks have the data to answer them ).

BBVA’s insight dashboard adds value to the existing transactional relationship by giving customers decision-making info and recommendations based on their data.

Image courtesy: https://go.forrester.com/blogs/bbva-tops-forresters-2019-global-mobile-banking-app-reviews/

OCBC

OCBC Bank, headquartered in Singapore, takes it a notch higher by taking existing data about you (online banking profile, transaction data etc.) and anonymously compares you to other people in your demographic.  

The insights customers get include their peers' average spending amount, most popular merchants, liabilities, assets, top saving goals, etc. Here’s an example:

DBS

DBS Bank, a multinational also headquartered in Singapore, has a unique digital banking approach, where they use customer data to bring customised content to individuals within its internet banking platform. In the screenshot below, DBS personalises the articles, and research customers see on their bank feed :

Users can also filter information on things they want to track(expenses, bill payment reminders, etc.), deals and promotions in tandem with their lifestyle. DBS shows customers content that’s personalised to match location, spending history (look-alike audiences are used for those with limited history), etc.

The bank has hired a team to achieve this type of hyper-personalisation; the kind of investment we need to see more banks putting into their digital experiences.

The steps to enhancing digital banking experience

What is the first step for a bank trying to build out an enhanced digital banking experience?

Let’s start with realising that we have trained our customers to view our relationship as transactional. For anything to change, though, this will need to re-train customers to start expecting more value from their bank.

1. Customer focus

This first step is vital. There has to be agreement within the business, that it wants to get closer to its customers and build that bridge to them. Without actually making customers a genuine priority, and thinking like Richard Branson aka a consumer champion, it is probably not worth the investment of getting it right, I am afraid.

2. A data strategy

Banks will need to look at customer data and question how they can make more out of it; perhaps augment internal data with a third-party’s to turn it into an offering with real insight for that customer. 

Wouldn’t Mary the mechanic appreciate it if her bank offered insurance suggestions to go with that new garage of hers? This can be made possible using insights from the data of thousands of other mechanics who’ve taken a similar step and flourished.

However, what banks have traditionally done on their digital banking channels is an attempt to upsell customers on their portfolio products (through banner adverts), never mind if the ads are related to the customer’s interests or behaviour. But don’t they work?

A 2013 study by Infolinks, an ad marketplace, found that 86% of the respondents couldn’t remember the display ads they saw nor the company that advertised it. 7 years later, with the ad industry growing (hello ad blockers), the situation worsens.

So what can banks do?

One sector banks can learn from that has excelled at hyper-personalisation is retail.

Amazon leads the pack; for example, the recommendations in the screenshot below were suggested after a single iPad search. These recommendations were offered up as ‘gift ideas’ rather than tell me to ‘buy this NOW’.

Fashion too has loads to teach banking, Stitch Fix, for example, has built its entire business on hyper-personalisation by helping customers curate their own styles. Pay attention to their messaging below:

‘Buy items curated to fit your style,’ note the focus on the customer’s need, not the company’s product. 

‘Skip hours of browsing and discover pieces curated just for you.’  Here, Stitch Fix captures a core value of personalisation in terms the customer can understand time. Whether in retail, fashion or banking, the ability for a company to help me skip hours in research by suggesting what I need when I need it is valuable.

Both of these companies collect data; Amazon has search history, Stitch Fix has their style quiz ( banks can use transaction data), and use it to tailor their messaging/offerings to get more value out of the customer.

3. Think content

For banks, the new frontier for an enhanced digital banking experience doesn’t involve throwing up pet financing banner ads when someone is paying for a new car in your app; it’s about matching content with intent and behaviour. 

Banks should think of introducing content in their internet banking platforms, in formats that customers are used to seeing on social media. Similar to how a good teacher would use toys and candy to teach a child math rather than throwing in Pythagoras theories and pie charts straight-away, use what customers are used to seeing in social platforms to get them to engage with digital banking as they would social, that way, banks can organically build that relationship.

This means being proactive is producing engaging videos, podcast snippets/links, dynamic tools and wizards that take people through the bank’s product journey in a very gentle way personalised from their data. 

4. Test and learn

In all this, banks will need to set rules, test, learn and eventually get an accurate picture that shows when customers are most likely to engage with them in a relationship that goes beyond transactional.

Setting up a test and learn frameworks allows a bank to test hypotheses based on combinations of content, timing, repetition, etc. This allows for refinement and on-going optimisation, bringing the bank even closer to its customer.

What needs to change for this digital transformation to happen?

At the moment, many bankers see technology as the most significant piece of the digital transformation puzzle, around which everything else fits. However, banks need a mind shift; think 30% technology and 30% operations rather than 90% technology and 10% everything else.

Banks will need to redesign their internet banking platforms from transactional to more relationship-oriented, requiring a significant cultural shift and questioning the norm.

Conclusion

With tech companies jumping the fence to take banks’ lunch, how much can banks afford to wait before embracing an enhanced digital banking experience? A focus on building relationships benefits both customers and the banks, let’s do it.