Key Takeaways
- Every customer is their own individual person with unique needs, wants, and preferences. For instance, while baby boomers and seniors prefer to spend more on groceries, Gen Z prefers to allocate more of their spending towards clothing and accessories. Similarly, while baby boomers and seniors have a strong preference for receiving cashback as a form of spending reward, Gen Z is more open to non-traditional, experiential rewards and exclusive privileges (e.g., subscriptions, memberships, etc.).
- Despite being run by diverse people themselves, many retail banks fail to deliver a sufficiently personalised experience to their customers across their value chain:
- Consideration: undertake generic awareness tactics as part of broad brand campaigns that lack segmentation or aren’t context-driven;
- Engagement: follow a one-size-fits-all messaging approach, with lack of differentiation across different outreach channels (e.g., email, SMS, in-app notifications, etc.);
- Uptake: push irrelevant products that aren’t informed by user-specific considerations and lack customisation; and
- Loyalty: lack personalisation, recognition, or proactive support that considers user behaviour or adequate context.
- Despite 74% of customers stating personalisation as important / critical to their banking experience, only 44% have experienced personalised banking, of which 52% were unsatisfied.
- Although the rise of digital banks has seen an improvement in personalised customer experiences, there continue to remain sizeable gaps, with retail banking facing lower customer retention rates than non-banking industries (76.3% vs. 82.5%). Retention rates are also on the decline (from 78% in 2022 to 75% in 2024).
The Future Picture
- Our proprietary research data indicates that retail banks have the potential to unlock notable benefits across the customer value chain from delivering more personalised experiences:
- Consideration: 63% greater likelihood of opening an account with a bank that provides personalised offers;
- Engagement: 36% better odds of engaging with a bank that provides a more personalised product / service offering;
- Uptake: 94% higher chances of purchasing a more personalised product / service offering; and
- Loyalty: 69% improvement in likelihood of keeping an account with a bank that offers personalised services.
- To harness the true benefits of personalisation, retail banks must evolve from delivering disconnected personalisation experiences to ones that are truly embedded (e.g., from siloed experiences to unified / seamless ones and from manual and reactive experiences to real-time and proactive one, etc.). Looking at notable examples in other industries, Amazon nudges cross-selling on its e-commerce site through a “You might also like” section that is based on a user’s purchasing tendencies, while Netflix showcases a home page with cleverly curated content that is contextually in-line with viewer preferences.
- To achieve this, retail banks need to:
- 1. Establish a Vision: identify the applicable scope of reforms, intended goals and measurable metrics;
- 2. Unify Data: integrate data from various channels for a unified, 360-degree view of customers;
- 3. Comprehend Users: understand each user’s unique behaviour and deliver true one-to-one personalisation;
- 4. Enable Real-time Decisioning: enable real-time next-best-action decisioning via a next-best-action framework;
- 5. Roll-out: adopt a phased approach to develop, launch, and monetise new products; and
- 6. Scale: gradually add more depth and variety of personalisation.
- Accomplishing this requires support from a series of operational levers that together form the bedrock of a robust foundation to build personalised use cases upon:
- Talent Development: build awareness and relevant skills for staff;
- Data Infrastructure: establish robust data infrastructure to properly store and analyse customer data;
- Data Governance: systematically manage data to ensure that it is accurate, secure, and properly used;
- Cybersecurity: safeguard technological infrastructure against adverse cybersecurity events to gain user trust;
- Financial Management: evaluate the financial viability of specific hyper-personalisation initiatives to ensure sustainability; and
- Capability Development: build the requisite capabilities internally and/or leverage external resources.
- Beyond this, our extensive experience has shown us that there are numerous success factors and key lessons that retail banks need to keep in mind to truly stand out from their competitors and succeed in the digital personalisation race.
How We Can Help
- Together with our partner, Synpulse, Quinlan & Associates can support your organisation in hyper-personalising your customer experience through the following pillars:
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Strategy Consulting:
1. Needs Assessment;
2. Business Case Development; and
3. Transformation Roadmap - Implementation Support:1. CVP Build-out;2. Customer Journey Curation; and3. Iterative Implementation
