It’s time for personalization in financial services
by. Matthew Lifshotz
In a post-crisis financial environment, customers are demanding solutions to satisfy their unique needs for money management. Additionally, they are showing preference for simpler products where benefits and risks are easy to understand and the feeling of control over the product increases their loyalty.
Therefore, banks and credit unions are facing a crossroads: acknowledge and embrace the demands of customers wanting more personalized and simplified services or try to push customers into a dated mass production model.
From Cookie Cutter to Papering Over the Cracks
Taking a look back in history, consumer products used to be built on a made-to-order basis, using expensive highly labor-intensive processes. To make things more affordable, companies began to adopt mass production technologies and techniques, creating a one-size-fits-all product line.
When Henry Ford moved automobile production to the assembly-line model, revolutionizing manufacturing, he divided labor into standardized tasks that were put together on a moving line. The individual creation processes and unique personalization of previous years moved towards a repetitive blueprint that was now centered on the product, not the customer. The result of this innovative change was standardized production that had lower costs per vehicle for both the manufacturer and customer.
Ford realized, very quickly, that mass production allowed him to achieve economies of scale, a key to keeping prices low and gaining an edge on competition. As a result of this success, all types of companies (including financial services) have been utilizing this model of mass production: focused on building the most popular products at the most economical cost, assuming that customers will choose the options they are presented with.
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