Banking

Customer experience and personalised banking services

Until four decades ago, banks catered to local communities. Bank staff and their customers often knew each other by their first names. With globalisation came a range of value-added services, service channels, and amenities, but the personal connection took a hit.

Today’s banks must compete not only with other banks but also with fintech firms, insurance providers, credit lending companies, and new entrants like Amazon and Google with their digital lending, savings, and payment capabilities.

As non-banks take over more and more products and services from the banking value chain, traditional banks risk losing significant revenue and customer loyalty. To fight this competition, many banks have started building brand value by offering an enhanced, customer-centric, and personalised banking experience.

What does personalisation mean in banking?

Personalisation, per se, is the use of customer data and behavioural analytics to anticipate consumer expectations and offer tailored services on demand. In banking, personalisation refers to understanding customers’ long-term financial needs and providing innovative services beyond account creation and access to funds.

A recent survey found that 93% of organisations perceive a personalised customer experience (CX) as a significant competitive differentiator. To offer an enhanced CX through personalisation, banks must:

• Ensure a seamless experience across physical and digital banking channels
• Automate business process in banking industry but retain the human touch
• Anticipate their customers’ wealth-management needs and offer targeted advice, recommendations, and products before customers turn to other providers

Types of personalisation in banking

There are primarily three ways of personalising banking services, as follows:

• Real-time personalisation

  Real-time personalisation utilises real-time and historical data to post targeted recommendations or advice while the customer is active on the bank site.

  For instance, intelligent bots can raise real-time alerts if the customer is in danger of missing a premium payment or recommend a product that aligns with their long-term financial goals.

• Prescriptive personalisation

  Prescriptive personalisation in banking is the process of segmenting customers based on shared characteristics and targeting each segment with tailored service messages and product recommendations.

  Segmenting enables bankers to predict customer behaviour, strategise effectively, and upsell or cross-sell products.

• AI/ML-based personalisation

  The goal of using machine-learning algorithms is to build predictive models of customer behaviour based on their profiles and financial activities.

  For instance, ML models can predict if a customer is likely to default on loan repayment by aggregating their long-term payment history. Based on this information, the banker can tailor the loan amount, interest rate, and tenor to best fit the borrower’s needs while minimising risk to the bank.

Ways to enhance CX with banking personalisation

Here are a few ways in which banks can drive customer loyalty and retention with personalised services:

• 365/24/7 support

  Customers used to anytime, anywhere, omnichannel support can neither settle for limited customer service hours nor wait their turn in physical or digital queues to troubleshoot problems. 365/24/7 Customer support through various channels is now integral to enhancing customer satisfaction.

  Modern banks must offer multi-channel support via phone, live chat, email, social media, and FAQs and ensure that this support is seamless by investing in CRMs with superior collaboration and visibility features.

  Furthermore, banks must also enhance their customers’ self-service capabilities by deploying intelligent bots and virtual assistants for support activities. 

• Personalised financial advice

  Apps for budgeting and investment advice are extremely popular among younger customers as they provide bespoke options for wealth management and financial health monitoring.

  With granular insights into their customers’ financial data, banks can easily tap into the growing demand for tailored solutions and offer personalised counselling and advisory services.

• Customised pricing

  With the range of financial service providers available, value-for-money is among the top decisive factors when customers shop for financial products. In the past, banks have tried to retain customers through competitive pricing.

  This, however, is a one-size-fits-all approach that may impact service quality and revenues. To tackle this issue, banks can personalise pricing models based on the customer’s lifetime value (CLV), immediate needs, and propensity to purchase. 

• Personalised products and services

  With access to comprehensive customer data across various systems and software, banks can offer tailored plans, products, and services in real-time and at scale. Below are some effective ways for banks to personalise product and service offerings:

  • Embedding services such as insurance, loans, and investment opportunities in the bank’s website and app
  • Embedding analytics for budget management recommendations based on the customer’s historical data
  • Enabling alerts and notifications for payments and new products
  • Using location data to offer relevant recommendations, such as information on partner retailers while travelling
  • Enabling real-time problem resolution through the website, mobile app, virtual assistants, and other digital channels

For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like living organisms will be imperative for business excellence. A comprehensive yet modular suite of services is doing precisely that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.

How can Infosys BPM help?

Infosys BPM recognises this and offers specialised services to help banks transform their business models and augment performance while delivering enhanced value to customers. Know more about our offerings for retail and commercial banking.