Hyper-Personalisation in Banking- Rewriting a New Era in Banking
The introduction of the Account Aggregator framework in India presents banks with an exciting opportunity to harness analytics across various data sources, including their own and external data like credit bureau information, and do so with the utmost respect for customer privacy. By seeking explicit customer consent for data collection, banks can ensure transparency and build trust while delivering highly personalised experiences that cater to individual needs and preferences..
In the digital age, the maxim "Data is the new oil" finds its most profound use cases in the banking sector. However, increasingly the success of using this large volume of data to deliver sustainable business depends on hyper-personalisation . This paradigm, harnessing the power of data analysis and digital technology, customises services to match each customer's unique profile, thereby fostering more meaningful interactions.
It moves beyond traditional customer segmentation, delving into individual behaviours, preferences, and needs, thus marking a significant evolution in customer engagement from banking engagement to financial wellness, therefore redefining the banking experience for the digital age.
Global Trends: Personalised Banking Experiences
Across the globe, banks are raising the bar in hyper-personalisation, offering tailored financial advice and resources. This hyper-personalisation strategy not only aids customers in making informed financial decisions but also cements the bank's role as a trusted advisor.
A CRIF whitepaper, “Data-Driven Personalization in Banking,” highlights customers are drawn to personalised experiences and services because they make them feel understood, valued, and appreciated by the providers. Hyper-personalization, on the other hand, creates an impression that customers matter on an individual level, not just as a segment of customers, even though most personalisation is an automated process, made possible by big data and analytics capabilities along with other rights technologies and processes.
In India, the banking landscape is experiencing a significant shift, primarily propelled by fintech companies pioneering hyper-personalisation for their use cases. These companies are at the forefront of this change, emphasising innovation and focusing on customer-centric services.
The introduction of the Account Aggregator framework in India presents banks with an exciting opportunity to harness analytics across various data sources, including their own and external data like credit bureau information, and do so with the utmost respect for customer privacy. By seeking explicit customer consent for data collection, banks can ensure transparency and build trust while delivering highly personalised experiences that cater to individual needs and preferences..
Combining hyper-personalisation with digital initiatives like Aadhaar and UPI could significantly enhance financial inclusion and empowerment in India. This synergy can provide more tailored financial services to various population segments, effectively addressing gaps in the current system.
The pathway to hyper-personalisation
Banks and non-banking lenders can achieve hyper-personalization by adopting a strategic execution framework built on specific tools and technology.
The foundation of this approach lies in the analysis of customer data like transactional, behavioural, and demographic details, from various sources like online banking activities, customer interactions, and transaction records. The integration of data from both digital and physical channels is critical to obtaining a comprehensive customer profile.
The next step in achieving hyper-personalisation is insight generation. Advanced analytics and big data technologies are crucial in this phase, enabling a deeper understanding of individual customer needs and preferences and moving beyond traditional demographic segmentation. In this phase, the focus is on extracting meaningful patterns and trends from the amassed data.
The next step is a platform to generate hyper-personalised visual insights and suggestions, tailored to each customer. These solutions offer a range of features, including financial summaries, data-driven insights, and suggestions for improvement of financial wellness. By offering customers a holistic view of their financial status, empowering them to make informed financial decisions. This is the last mile in the pathway that delivers personalised moments of truth for customers.
Experimentation and Execution: The Path to Success
Selecting the optimal platform strategy for hyper-personalisation is pivotal in unlocking its potential. Financial service providers that choose platforms known for their specialisation in hyper-personalisation, global expertise, and modular architecture can pioneer innovative features and services. This approach fosters agility and adaptability, essential for responding to evolving customer preferences and maintaining a competitive advantage in the marketplace.
A prime example of this approach can be seen in the array of Personal Financial Management tools available in the market. These tools exemplify how financial institutions can leverage technology to offer tailored financial advice and solutions. By integrating this, banks and financial service providers can deliver a more personalised and cohesive customer experience. Furthermore, this integration allows them to analyse individual financial data in real-time, enabling customised financial insights and recommendations.
The capability to experiment and scale efficiently is crucial for staying ahead in the competitive landscape. Moreover, the right platform empowers banks to meet and exceed customer expectations with a seamless and highly personalised banking experience.
In essence, deploying advanced technologies and platforms is about strategically employing these to generate value for the bank and its customers. Financial entities that adeptly navigate these technological choices are set to lead in the new era of hyper-personalised banking.
Navigating the Shift to Hyper-Personalisation
The shift towards hyper-personalization in banking and fintech, fuelled by the strategic use of cutting-edge technology and big data analytics, marks a significant evolution from traditional, demographic-based approaches to a more individualised understanding of customer needs. By navigating this transition successfully, financial institutions enhance customer experiences and establish new benchmarks in digital banking.
In the long term, embracing hyper-personalisation offers dual benefits. For the organisation, it leads to increased customer loyalty and retention, driven by superior service delivery and a deep understanding of individual customer needs. For customers, it translates into more tailored financial products and services, enabling them to achieve their financial goals with greater ease and precision. This symbiotic enhancement of value underscores the importance of hyper-personalisation in shaping the future of banking and fintech, where both providers and customers thrive together in a more connected and personalised financial ecosystem.
Author : Mr. Subhrangshu Chattopadhyay, Director of Business and Head - Strategy, CRIF India.
Source Publication: ET BFSI