Banking Industry Fails to Meet Personalization Expectations
Consumers expect their financial institution to understand their needs and deliver personalized solutions similar to what they receive from Google, Amazon, Facebook and Apple. Unfortunately, despite advanced AI technology, most personalization expectations remain unfulfilled.
By Jim Marous, Co-Publisher of The Financial Brand and Owner/Publisher of the Digital Banking Report
The combination of big data, advanced analytics and new digital technology is helping all industries create engagement with consumers on a level of personalization never before imagined. We are quickly moving from an eCommerce environment that once responded to customer needs to one that now anticipates needs… in real time.
In the financial services industry, one of the results of this digital transformation is a marketplace crowded with new fintech start-ups and, to a certain degree, major technology firms such as Google, Amazon, Facebook and Apple that are moving market share from legacy banking organizations. As consumers become increasingly demanding around their expectations for a more personalized digital experience, significant “personalization gaps” are appearing between what consumers want and what financial firms can deliver.
A research study from GfK shows there are ever increasing gaps between what consumers hope to receive from their bank or credit union – in terms of both level of service and financial advice – and what they actually receive. At a time when all financial services organizations are investing significant time and money in improving the digital customer experience, the research shows gaps in deliverables of between 13 to almost 40 percentage points.
For example:
- Ways to avoid penalties and fees: 39-point gap
- Tips to improve finances: 30-point gap
- Identify changes in spending patterns: 25-point gap
- Suggest beneficial services in real time: 23-point gap
- Alerts about unusual bank activity: 13-point gap
- Provide third-party offers based on behavior and location: 10-point gap
Relationship With Banking Strong… Or Is It?
Despite these gaps in deliverables, Net Promoter Scores have risen over the past two years and only 6% of consumers indicate that they will move their accounts in the next 6 months. In fact, 41% of consumers are still likely to be a promoter of their bank and 73% report being unlikely to move their relationship.
Interestingly, compared to 2015 data that was included in the Digital Banking Report, The Power of Personalization in Banking, the proportions of respondents who were likely and unlikely to switch both increased slightly, with the unsure group narrowing.
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Building Powerful Brands with UX/UI Design on LinkedIn | Product Designer
3moJim, thanks for sharing!
CEO at Xponential | CTO | VC Partner | Retail & FinTech Advisor
7yWell, I dont think that Banks as such aren't doing this. I think there are examples of multinationals are playing very well in this - both for Consumers and corporations.
Co-Founder & Executive Director at VVPave
7yIt seems that is not easy to place the customer as the first and unique focus. Identifying their specific needs, recognizing their individual behavior and satisfy expectations. A lot of information is available,. The issue is to transform data into insights to predict behavior want needs.
Director Business Systems
7yhow many steps are financial institutions behind these big companies? What do we need to whiteboard? really good thoughts.