Customers today expect seamless, personalised experiences across every aspect of their lives, from entertainment to retail, and banking is no different. As digital interactions become the primary touchpoint for many, with 90% of Brits using online banking and an exponential growth in digital only banks, banks can create a significant advantage – as well as happy customers.
Meeting the modern customer’s expectations
Research shows that over 80% of financial institutions (FIs) consider personalisation a strategic priority.
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The point of personalisation is it goes beyond static, one-size-fits-all approaches but through a mix of data, creativity and psychology, uses customer data (with their permission) to create unique and personalised engagement. For instance, a first-time mortgage seeker may benefit from personalised educational tools that explain their options, while a frequent traveller might appreciate being alerted to rewards tailored to their spending habits.
These moments of relevance are what differentiate a great customer experience from a good one. Most people think that personalisation is about convenience, but that’s only the surface. Really it’s about demonstrating that a bank truly understands and values its customers. Your customers, just like your partner or friends, want to feel special. And with the right systems in place, banks can do just that.
Driving impact across the customer journey
Personalisation has the power to transform every stage of the customer lifecycle. During acquisition, banks can optimise their return on investment by ensuring that advertisements and landing pages align with each customer’s unique needs. For example, a customer clicking on an ad for a cashback credit card should be guided to a landing page with relevant information, not a generic homepage.
Once customers are on board, personalisation continues to play a critical role. Whether it’s by sending timely reminders to complete applications or offering guidance through complex processes, these tailored touches help reduce drop-offs and build trust. As relationships mature, personalisation can uncover cross-selling opportunities, offering products and services aligned with customers’ evolving needs. It makes sense that a year after taking out a mortgage a home insurance renewal will come up, for example. Or consider a scenario where a long-term customer, initially using a bank’s savings account, starts exploring investment options. By using data and diving into the insights, the bank could recommend specific investment products based on the customer’s financial goals and behaviour.
Data, technology, and the trust factor
At the heart of personalisation lies data – how it’s collected, managed, and used to create impactful experiences. The rise of artificial intelligence (AI) and machine learning has empowered banks to process vast amounts of data in real time, delivering highly individualised recommendations at scale.
For example, AI can identify patterns in spending behaviour, allowing banks to recommend budget tools or savings plans tailored to an individual’s habits. Similarly, geolocation data can trigger contextually relevant alerts, such as offering loan options during a visit to a car dealership.
And of course, with this great power comes great responsibility.
Overcoming barriers to personalisation
While the benefits of personalisation are clear, implementing these strategies isn’t without challenges. To make it work you need to reduce siloes, upgrade your systems beyond legacy, and align everyone in the organisation towards a common direction. It’s this kind of unified approach that means advanced technology can deliver meaningful outcomes.
To overcome these hurdles, banks must invest in robust infrastructure and foster a culture that values collaboration. Appointing dedicated teams to oversee personalisation efforts, integrating data across channels, and embracing agile methodologies can help banks stay ahead in a competitive market. But just having data isn’t enough – it needs smart analysis and deep thinking to get into the heart of what it means for consumers. Insight is always greater than data alone. Ask the right questions and dig into what you already know about customer lifecycles. Work with creative teams to leverage the data into smart and impactful campaigns. And don’t forget the simple tools like customer service team feedback and consumer surveys, that can be full of rich information.
Start small and scale gradually. By focusing on quick wins such as improving email engagement or refining landing page experiences, banks can demonstrate the value of personalisation and build momentum for larger initiatives.
Benefits for customers and banks alike
When done right, personalisation creates a win-win scenario. Customers enjoy seamless, relevant interactions that make their financial lives easier, hopefully save them some money, and keep them feeling in charge of their finances, while banks benefit from increased loyalty, reduced churn, and greater revenue per customer. For instance, personalised product recommendations can help customers discover financial tools they might not have considered, such as a retirement savings plan or a business loan. Nudging customers to set up autopay or explore investment options can deepen relationships as you become a more integral part of someone’s life.
Ultimately, personalisation is about building trust and loyalty. It’s about showing customers that their bank isn’t just a service provider but a partner invested in their financial, yes, but also personal success. Because banks are a part of the biggest things we do – first jobs, first home, marriage, children. It is by putting customers at the heart of their strategy that banks can unlock the full potential of personalisation, creating meaningful experiences that drive lasting value for both customers and their business.
Harry Hanson-Smith is Vice President UK&I, Nordics & Netherlands at Dynamic Yield by Mastercard
