The rate of tech transformation in financial services organizations has been slow, especially in large incumbents and small community firms, placing them at risk of disruption. However, the rewards can be significant if change is embraced. Analysis by Cisco estimated that digital innovation in retail banking will drive $405 billion in Digital Value at Stake between 2015-2017.
It’s not merely a case of new technology for its own sake. A Federal Reserve study found that approximately 67% of millennials use mobile banking, compared to 18% of people aged 60+. Therefore user behaviour is shifting, with business models adapting to this trend.
The Benefits Of Content Personalization
AI, machine learning and software robots can customize traditional processes. Cognitive computing understands and learns from disparate sources to aid marketing automation, messaging, and giving customers personalized advice on budgeting or investing.
“While [cognitive technology and artificial intelligence] is still early in its maturity, we are beginning to see it used by banks to support more personalized client interactions,” said Chae H An, vice president and CTO of the financial services sector at IBM.
In Singapore, the DBS bank collaborated with IBM Watson in this way so it could develop its customer experience.
Advanced Analytics To Improve Real-Time Communications
The massive growth in data production, especially from always-on mobiles, has an impact across the financial sector, from insurance and payments to retail banking. Geospatial and customer engagement statistics also provide a fuller understanding of users’ behaviour.
“Financial services have the opportunity to use insights gleaned across both physical interactions and digital channels and consolidated in a unified manner to truly understand and best serve the unique individual,” wrote social media entrepreneur Clara Shih in TechCrunch.
Infrastructure Opens Up
Increasing support for APIs (application programming interfaces) is one of the newer ways to use personalization for financial services. APIs enable open banking platforms and mutually beneficial partnerships between banks and customer-centric technology companies. Institutions can then connect their financial framework to third-party app developers who deliver optimized user-friendly interfaces.
New Zealand’s Westpac banks partnered with the Moven financial management app, for example, and Capital One works with Amazon’s virtual personal assistant Alexa. The coming months should see further consolidation of the complete ‘bank in an app’ concept.
Why Personalization Matters In Financial Services
Automating a user-led approach could mean that more efficient, software-driven financial operations risk becoming impersonal. As the Frog design agency explained, “Machine intelligence offers new possibilities for the industry at the same time it threatens to favour efficient experiences over human experiences. For financial services to secure a competitive advantage they must focus on people.”
According to Financial Brand co-publisher Jim Marous, “Financial institutions need to re-imagine their core journeys from front to back by addressing key customer pain points, identifying new opportunities to delight customers in differentiated ways.”
Whether you’re playing catch-up or spearheading innovation, the financial services revolution has only just begun, fuelled by customer-centric design and personalized digital interactions. Knexus creates an environment to communicate your best content at the right time, through the most appropriate channel to precisely the right audience in real time.