Why banks need to deliver personalized customer experiences

When it comes to digital experiences, consumers are not measuring banks against one another, but rather with leading digital commerce companies such as Amazon, Apple or Zappos. Consumers today look for the brands they interact with digitally to provide consultation and proactive advice on which products or services they might enjoy based on what that company knows about that customer.

Unfortunately, banks all too often fall short in this respect. They still mail credit card offers to consumers who have that exact same credit card already. They send email messages offering mortgage products to 22-year-old millennial customers who have just graduated college and hold a mountain of student debt. The majority of financial institutions of all sizes – big and small – are often unprepared to provide personalized advice, communication and offers to their customer base.

This cannot continue for financial institutions that want to survive – and thrive – now and in the future. As noted in The Financial Brand[1], the idea of customer centricity is crucial – if financial institutions focus exclusively on the customer and their specific needs, they can tap into their unrivaled scale and reach to stave off the competition. The article further notes that PwC predicts that by 2020, “Banks will organize themselves around customers instead of products or channels” and they will recognize the uniqueness of each consumer and tailor their offerings so that customers view banks as ‘meeting their needs’ not ‘pushing products.’ It’s no longer just about the product – it’s about the customer.

This is especially important as digital-first marketing becomes the new normal. Among financial services companies alone, digital marketing spend in the U.S. is estimated to reach $9.42 billion, an increase of 12.6%[2] And digitally savvy consumers can pinpoint a traditional, generalized sales pitch from a mile away; they are more likely to respond to contextualized, advice-focused content from companies that try to engage them. The blatant fact is that consumers simply tune out mass marketing that doesn’t provide personal and relevant value to their individual needs. This means lost revenue opportunities and a chance to be more “sticky” with customers. Indeed, customers are two times more likely to spend more money on a brand that engages them [3], even if a competitor has a slightly lower price.

Want to know how banks can deliver a personalized experience? Read the full white paper.