Personalization is key to customer experience

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By Rene Haeberlin

Banking used to be a personal business. For most people, the focus of their banking activity was the local branch, where the tellers handled money in and out of your account, and the manager made decisions about your mortgage, personal loan or overdraft.

While a small section of the community remains nostalgic for those simpler times, most of us are rather pleased that banks have transformed the way they do business. We’re happy to be able to transfer money in and out of our accounts wherever and whenever we like. We want to be able to shop around between multiple providers looking for the best deal on a loan or mortgage.

Personal matters

The local branch is in decline. Whether or not it disappears completely is likely to be matter of social, civic and political consideration rather than a purely commercial decision. Which is not to say that those considerations are unimportant; quite the opposite. But for a growing proportion of customers, branches are becoming irrelevant; and for the banks themselves, they are likely to become an increasingly expensive burden.

But the removal of physical human interaction from the personal banking process needs to be replaced with something that still feels personal. Why? For a couple of reasons.

Money matters

Firstly, because money is so integral to people’s lives, banking is an everyday matter. Despite the increasing use of the term “utility banking”, the fact is that we don’t deal with money the same way we deal with gas and electricity, where we select a provider, set up a direct debit and then forget about it until something makes us want to change.

With the increased flexibility and control offered by modern banking comes a greater need to interact with our bank more often. So the customer experience needs to be flawlessly designed across all touch points, from branch to web to mobile to call centre. More importantly, if something goes wrong with the customer experience, the bank needs to be able to respond quickly and appropriately.

Customers need to feel that they’re interacting with ‘their bank’ – a single, familiar organisation that knows who they are and what they need. The problem is that “under the bonnet”, banks often don’t behave as a single organisation, but as a confederation of related but separate departments.

Banks need to master the art of personalising the customer experience because that phone call to the customer service team, that takes half an hour and requires the customer to explain their problem to three different people, is likely to be the last call they make before they switch to a different bank.

Trust is everything

The second reason why personalisation is so important comes down to trust. Money, debt, income, savings and wealth are all intensely personal matters. Which is why it’s generally frowned upon to talk about them at dinner parties.

The bank is the guardian of these secrets and consequently occupies a unique place in the customer’s world – a place of trust. People trust their bank with large amounts of personal data. Provided the bank meets its obligation to protect that data, and uses it diligently to deliver real customer value, then this trust presents a unique opportunity.

Financial institutions have the data, status and relationship to become the customer’s trusted advisor. By analysing and understanding customers’ spending behaviour in granular detail, banks can identify multiple opportunities to create highly personalised, tailored offers and services that offer considerable value to the customer, additional revenue opportunity to the bank, and that strengthens and deepens the customer relationship going forward.

Beyond the bank

Banks, like all established financial institutions, face an existential threat from digital disruptors. Unburdened by the cost of managing physical branches or cumbersome legacy systems, these nimble players are able to quickly bring to market the kinds of creative, highly personalised products and services that customers want.

To compete, banks need to understand their true role in the consumer’s life. Customers are already looking to their finance providers for assistance with lost cards, motor breakdown recovery, identity theft protection, discounts with partner retailers, purchase protection, SOS travel assistance, home emergency coverage… even airport lounge access.

By understanding their customers, and delivering a tailored and personalised service, banks can deliver an outstanding customer experience across all channels, building the engagement and trust that ultimately leads to long term customer loyalty.

Technology can integrate existing siloed systems, people and processes, enabling banks to gain a 360 degree view of their customers. But ultimately success will depend on a change in thinking, developing an internal culture that’s relentlessly focused on leveraging these systems, people and processes, and the bank’s unique place in the customer’s life, to deliver a high-value, highly personal service.

Click here to see the original article on Linkedin.