A blogpost by data science and behaviour change firm Sentiance has highlighted the growing importance of hyper-personalization in the retail banking sector.
The blogpost was compiled by Sentiance Head of Client Oliver Bath and can be found underneath.
Personal banking will never be the same again. Proof of this can be seen with the recent announcement that Belgium’s largest bank, KBC, bought the media rights to broadcast Belgian soccer goals and highlights in their mobile app, because soccer is the prime activity and entertainment sport in Belgium.
This is not the first time we’ve seen bold moves like this either, Tinkoff, in Russia, has purposefully built a super app that provides customers access to their growing ecosystem of financial and lifestyle services. OTP Bank in Hungary allows their customers to purchase train tickets in-app. Revolut allows its users to trade stocks and cryptocurrencies while providing access to exclusive airport lounges.
Why you should serve customers beyond your core offerings
WeChat are an example of a company that serves customers beyond their core offerings. Instead of remaining just a messaging app, WeChat rapidly kept users coming back for more by creating a lifestyle of commodification and convenience through combining multiple, relevant, functions that provide its users with third-party services, including buying movie tickets, hailing a cab, ordering food delivery, paying utility bills, or sending money to friends.
In fact, it’s not unusual for a WeChat user in China to plan a date with a friend via instant messaging, make the lunch reservation, order a taxi and pay for every transaction along the way, all using one single app. It almost feels like a lifestyle partner that knows and meets all your needs. As we know, the more value you can provide your customers, the more they’ll engage with your products and services.
With everyone carrying a mobile phone in their pocket, companies are constantly competing for peoples’ limited time and attention. The way to win the game is to create relevant engagement and offerings for your users and make their life easier. The more time users spend in an application, the more that company can learn about that customer and provide more relevant products and services that deepen engagement, or better said, increase loyalty.
Companies across industries are attempting to create ecosystems where people want and need to spend time. Banks, and certainly the neo-banks, have understood that message and need to create hyper-personalization at scale using the power of smartphones.
How much do banks know about customers?
Knowing your customers nowadays is more than just a fact sheet, it’s about knowing your customers’ lifestyles, personal preferences, life stages, and much more. The secret weapon that the likes of WeChat have, and banks of the future need, is real-time and real-world understanding of who their customers are as they move through their everyday lives. These behavioural insights are crucial for creating relevant engagement and contextual offers to retain your customers.
It’s not just super apps like WeChat, but the neo banks, too, that will disintermediate banks from their customers by providing a simpler, yet more personalized banking product, that better target financial products to customers, at the exact time they need them.
This rise in competition from these agile FinTechs and neobanks as well as the increase in a fickle customer always looking for the next best thing has meant that now more than ever, retail banking needs to find ways to know and engage the customer in a hyper-personalized way. Read any of the more recent reports from the likes of PWC or Deloitte on the future of retail banking. You’ll be well aware that seamless and personalized service is what it will take to win and keep the customer of the future.
Key banking trends
Highlighting key banking trends, offering contextual offers in real-time will be a big differentiating factor while banks will also establish new technology ecosystem partnerships to offer integrated systems beyond banks.
Furthermore, AI will enable banks to become customer-centric organisations with new products focusing on customers’ financial wellbeing. Banks will also be real-time, intelligent, tailored and deeply integrated into customers lives.
The original blogpost can be read here.
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