Call it what you will – the “Netflix” or ”Amazon effect” – consumers increasingly expect how they interact with their Financial Service Providers (FSPs) to mirror the customized, digital experiences they get with these and similar technology giants.
This is significant as two-thirds of Americans now claim online and mobile as their primary banking channels. Where competition was once about account features, interest rates and lending, winners and losers going forward will be determined by the data-driven, hyper-personalized digital experiences FSPs can offer.
Know me, understand me, help me
FSPs have the data. What needs to change is that instead of leveraging this data to do more transactions, it needs to be used to develop customer-centric experiences and actionable insights. By using data enrichment capabilities, financial analytics, AI algorithms and machine learning, FSPs can help consumers see exactly where they spend and monitor whether that spending is over, under or in line with individual financial goals or their peers.
For example, what if the mother of a teenage gamer wants to monitor his spending habits while also teaching him about budgeting. Suppose she could easily set up a tool on her son’s debit card dashboard that alerted her when her teen goes over his spending limit.
The Millennial imperative
Millennials and Gen Z are already digital natives, so FSPs can insert themselves into their online and mobile lives by offering account aggregation, budgeting information and peer benchmarking focused on individuals’ financial well-being. Providing financial education in a format customized to fit their very specific needs helps FSPs earn that coveted trusted adviser status and lifetime loyalty.
It’s all in the delivery
Personalization extends beyond data and analysis into strategic and integrated deployment. Delivery must be simple and consistent across all channels, from digital interfaces to conversational banking options. Juniper Research forecasts that by 2022, 93% of chatbot interactions will be successful, achieving operational efficiencies while also meeting customer demand.
The time is now
In a world where most consumers think and act “digital first”, FSPs must leverage new technologies to enable hyper-personalized experiences in real-time, and in any channel. But, it will be worth it. By aggregating all customer data and using it to provide a personalized, digital experience, FSPs stand to increase customer retention by 5%, and profits between 25% and 95%.
How Envestnet | Yodlee can help you deliver hyper-personalization
For more information on how Envestnet | Yodlee can help you build robust digital financial wellness experiences, please visit our solutions homepage.
