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Why Doesn’t My Bank Know Me? How to Develop a Personalization Approach

Alex Jimenez

Managing Principal, Financial Services Consulting
Blog
  • Financial Services

It wasn’t that long ago when consumers noticed that brands seemed to be following them online and offline. Many consumers felt that it was spooky and intrusive. But a curious thing has happened lately. Consumers have begun to expect messages that seem to be tailored to them, whether it is a recommendation for a new product from Amazon, the next movie to watch on Netflix or an online shop offering them a product based on their social media activity.

According to J.D. Power’s 2022 U.S. Retail Banking Satisfaction Study, 78% of banking consumers expect personalized support from their bank. Yet only 44% of banking consumers felt their banks were delivering personalized support. This gap between expectations and experience has been noticed by banking executives. A 2021 survey of banking executives by fintech firm Bottomline Technologies found that 75% of respondents aren’t confident in their ability to offer personalization.

The Personalized Banking Customer Experience

The importance of personalization is how it can build an emotional connection between a customer and a brand. Personalization doesn’t mean having a thorough understanding of the customer from the start. If we consider the buying process, we can identify how personalization can be presented while a bank begins to build the profile of a customer.

When a prospect is merely researching a banking product, the bank can personalize the experience based on what it knows about the customer at that time. It may be location, website activity, search history, type of device being used or time of day.

Once a person’s behavior points towards making a choice, the bank can present choices that make sense given what they know about the customer. More importantly, it can remove as much friction as possible in obtaining that banking product. This includes smart forms that prefill information, bundling of products and performing qualifications (such as identification and KYC) in a way that feels seamless and organic. 

Banks often do a decent job in the first two steps, but they fall down on the onboarding process. Setting expectations on what follows and walking the customer through the process are paramount parts of presenting a personalized and engaging experience.

Once the person does become a customer, the bank should have an ongoing program of managing the experience, not just with the current products they have, but all services that they are likely to want or need throughout the span of their customer journey. Cross-channel coordination is important. For example, if a customer calls the contact center from their authenticated mobile app, they shouldn’t have to authenticate once again during the call.

As the bank builds an increasingly thorough customer profile, the customer should be presented with contextual advice, offers and relevant information. As customers begin considering new products, the bank should be there when that happens so they will come back and grow the relationship further.

Many banks struggle to even define the approach they must take to be able to deliver. The approach takes coordination, planning and dedicated execution.

The Personalization Equation

Personalization occurs when there is understanding of the customer, relevant content is ready to be presented, a decision engine is employed to match the content and the customer need and there is a way to present the personalization in context. We call this the personalization equation.

  • By customer 360, we mean the ability to have a single view of the customer and affiliated entities, such as businesses, family members and partners. The details of this profile should go beyond mere demographics. It should include product information, transaction and interaction data, as well as attributes available from third-party providers. Many brands also include social media activity.
  • The content presented as part of the personalization, whether it is advice, a product offer or some other element, must be produced in a manner that can be activated. Content should be available in various media including short and long form text, video, and imagery that can be combined as appropriate. Content requires management tools including tagging and workflows for production.
  • To match the customer needs or wants, arrived from insights coming from the data, and the content prepared, a machine-learning (ML) decision engine is employed. The system determines what content to present based on what is known about the customer and contextual to what they’re doing. The engine learns from each interaction becoming smarter as it goes along.
  • A method or methods to activate personalization is required. This includes workflows for presentation via various channels, including physical channels by prompting employees dealing with customers. Activation should also include customer journey orchestration within each channel and across all channels. 
How to Start the Personalization Journey

Obviously, a bank can’t just personalize all interactions by merely wanting to do so. Like all efforts that evolve the bank and its business model, banks should follow a process. Our suggested steps are:

1. Set your three-to-five-year vision defining the type of personalization that customers would be presented throughout their banking journey.

2. Build internal alignment. Personalization will require a coordination of data, content, governance, distribution channels, media, compliance workflow and measurement. If all these functions don’t sit within your specific domain of responsibility, then you’ll need to create a “personalization ecosystem” marching in step.  

3. Assess your marketing capabilities, data environment, content-creation process and partner relationships. Questions to consider include:

a. Do you have the building blocks already in place, but perhaps under-utilized, or in need of upgrade?
b. What gaps do you have in your capabilities that require filling?
c. Which partners can you leverage to help you fill gaps?

4. Velocity is key. Review internal processes (such as legal- and compliance review and marketing workflow) to define your ability to keep pace. Assess all processes and operating models to understand potential inhibitors.

5. Determine the readiness of the activation channels (online & mobile banking, email, SMS and site) to accept a higher velocity of content. Questions to consider:

a. What constraints do you have? 
b. What’s in your direct control? 
c. What will require third-party involvement?

6. Build a pragmatic year one and year two roadmap, based on the results of the points above, addressing gaps, challenges, specific objectives and key results.

Figure 1. Personalization Maturity Curve

The journey towards the desired personalization state is an incremental one. We have defined three stages in that journey (see figure 1):

Static: This stage is where most organizations currently operate. Personalization, if any, is limited to specific channels, relying on low levels of technology, and are employed in more of a shotgun approach. Personalization begins by using customer-defined characteristics such as preferences.

Rules-based: As organizations start to apply segmentation to their personalization efforts, different experiences may be presented based on assumptions made on what segment a specific customer may belong to. Technology use here is reliant on simple “if-then” algorithms with some connections between channels.

Behavioral: When the organization’s capabilities move to this stage, customers may experience personalization that is specific to them and their exhibited behaviors. Such levels of personalization require machine learning technology, coordinated data routines and integration across channels. Even within this stage there are levels where behavioral-based personalization starts slow within a channel or even just a single kind of experience building up to the full target state.

Meet Expectations or Expect to Fall Behind

Building a personalization capability to match the expectations of the modern banking consumer is a complicated task. However, it is one that is required to maintain or improve a bank’s position in the market.

Ultimately, customers already expect that banks know them and provide relevant offers, content and personalized support based on who they are, where they are in the customer journey and what they’re doing. If banks don’t meet these expectations, they will fall behind the competition and may never recover.

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