How Financial Service Providers Can Benefit from Hyper-Personalization

Personalized digital experiences are taking over everything from Friday night pizza delivery to clothing subscription services. Today’s consumers expect to be treated uniquely in every business relationship or they might abandon it.

For Financial Service Providers (FSPs), this means going far beyond segmenting and microtargeting. Instead it requires hyperpersonalization – the ability to use data and analytics to develop a deep understanding of each customer’s needs and orchestrating a set of tailored experiences across digital and human channels.

A win-win for both Financial Service Providers and Consumers

Such personalization is critical for the relevancy of FSPs’ moving forward. Consumers want an FSP that offers convenience and omni-channel, device-agnostic delivery wherever they are literally, at any moment, and throughout their financial journey.

FSPs possess a multitude of data sets that build a more comprehensive picture of customer behavior, including online interactions, geo-location data and aggregated payments behavior. They can use that insight to help predict the needs and desires of their customers. Advanced data science capabilities that deliver useful analytics and clearly visualize insights have the potential to pay huge rewards.

Fortunately, FSPs don’t have to be large to benefit from the operational and consumer insights gleaned through hyperpersonalization and can get help to get there.

The Boston Consulting Group estimates that for every $100 billion in assets a bank has, as much as $300 million in revenue growth can be reached through personalized customer interactions, resulting in driving “material competitive advantage for first movers that embrace it over the next five years.”

Delivering operational improvements

Hyperpersonalization imparts operational benefits as well. Achieving more comprehensive views of customers to build meaningful insights requires breaking down data silos. The sophisticated data aggregation and leading-edge AI and machine learning techniques needed for analytics enables operations managers to better measure efficiencies, service channels and customer satisfaction, including expanding their repertoire of key performance indicators. And automation, already an important part of consumer banking, will penetrate operations far more deeply in the coming years, delivering benefits for a bank’s cost structure.

An example of these technologies coming together to provide operational efficiencies –yet remain 100% customer-centric – are chatbots. According to Juniper Research, “Chatbots hold the potential one day to replace the tasks of many human workers with AI programs sophisticated enough to hold fluent conversations with human users.” The firm estimates that chatbot transactions save employees four minutes each and 70 cents per transaction, which can be especially important during uncertain economic times when call volumes and customer service staff may be stretched thin.

Getting hyper-personal pays off

Ultimately, if done well, hyper-personalization can provide a direct route to lower rates of customer churn, higher sales and savings from operational efficiencies in call centers, fraud research, error resolution and other operational costs. Using data-driven analysis and decision making through AI and machine learning allows FSPs to make decisions that benefit the organization and its customers with confidence.

For more information on how Envestnet | Yodlee can help you build robust digital financial wellness experiences, please visit our solutions homepage.