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Staying Competitive in Banking With Real-Time Personalization

Posted on: April 3, 2018 | Posted by: Sona Sharma

It’s no secret that the banking industry has been on the path to digital transformation for the past few years, with the impetus to transform coming from multiple factors. There are the tech savvy millennial customers and their evolved expectations of instant outcomes for any service they engage with. Then there is the growing competition from companies such as Amazon, Uber, Google, and Apple that are heavily engaged in different parts of the banking value chain ranging from loans to payments. There is also a list of pure play companies (Paypal, Venmo) that are putting forth made-to-order banking alternatives for Millennial and Gen Z audiences in order to disrupt a slow moving market. Clearly, traditional banks are finding themselves in an increasingly vulnerable position.

The good news is that banks know the challenges they are facing and recognize what needs to be done. According to the latest report on 2018 Retail Banking Trends, banks, credit unions and the supplier community stated the following as their top 3 trends:

  • Removing friction from the customer journey
  • Improving the use of data and advanced analytics
  • Making refinements in multichannel delivery
The not-so-good news is that the pace of change has been slow. The above report noted that the top key trends have remained pretty consistent in the past couple of years for the financial services industry, indicating that not much progress has been made to alleviate the situation. Let’s take a simple example. Today, Uber can tell you exactly where your car is to the accuracy of milliseconds in any part of the world. However, if you are using your banking app and depositing a check, you don’t get your account balance updated till the next day! Why does it take 24 hours for the account to update? Customers today expect their banks to know who they are, what their needs are, and to provide them information that is relevant to them. They are looking for a smooth and instantaneous, or real-time, interaction with their bank, whether they are talking to a teller in the branch or are on the bank’s mobile app or the website.

The silver lining here is that banks understand what needs to be done to differentiate themselves to win the business and loyalty of this new generation of consumers. Now, more than ever, it is critical for them to put their digital transformation plans into high gear. The top 3 trends mentioned above clearly show that to be successful, banks must deliver a seamless, highly personalized multichannel engagement and experience to their customers, when they want it and how they want it. To achieve this goal, banks need to:

Three_most_important_trends_for_retail_banking_industry_in_2018
  • Gather and analyze real-time user data,
  • Reference past transactional data,
  • Incorporate relevant data from other external/internal data sources,
  • Respond with the best action in real time while the user is still in context.

The framework of a real-time economy demands this level of contextual responsiveness. To read more about how banks can achieve such contextual relevance and real-time personalization, download our latest whitepaper A New Paradigm in Digital Banking: AI Powered Customer Engagement.