The personalization engines of retail giants, including Amazon, have established a new standard for customer experience. As a result, consumers now have the same expectations outside of retail environments. They want their banking provider to understand them, provide recommendations and anticipate their needs — when and where they prefer — just like leading e-commerce brands.
However, banks and credit unions are struggling to meet this expectation. Research indicates that 57% of consumers view their bank as a “necessary utility,” while only 37% see it as a “trusted partner.” To change this consumer mindset, financial institutions must shift from a transactional approach to relationship-based engagements — where personalization takes center stage.
For effective personalization, an institution needs to know all that is knowable about its customers. Fortunately, banking providers typically have a wealth of consumer data on file from past transactions and activities, which can be used to customize each future engagement. However, this data is not always accessible. Additionally, due to the stringent regulatory requirements, financial institutions are often hesitant to leverage this information.
While it is crucial to respect consumer privacy and adhere to compliance guidelines, there is still a major opportunity to improve customer experience with personalization. There are a several best practices banks and credit unions can incorporate to foster more personalized consumer relationships, while ensuring both trust and transparency. Here are three of the most important ones.
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