How personalized experiences are transforming digital banking

The one-to-one connections financial institutions can provide are more important than ever, even with personalized experiences rarely being delivered in person.

Consumers of all types have become comfortable managing their lives through digital channels, and, for many, it is has become their preferred method of interaction with their financial institution. Accordingly, financial institutions are evolving digital capabilities to offer more sophisticated interactions intended to enhance customer relationships.

The one-to-one connections financial institutions can provide through personalized experiences are more important than ever. The catch is that personalized experiences are now rarely delivered in person.

Evolving technology enables more meaningful personalization that financial institutions can offer virtually. The big question for financial institutions in 2022 — and beyond — is how they can accelerate and differentiate existing offerings.

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When it comes to expanding their digital strategy, financial institutions have two options: Add new technologies into an existing mix, or step back and re-evaluate their offerings.

The former is often the chosen road, as it is easier to execute a one-by-one approach. But it is important to not lose sight of the big picture, particularly in a continually shifting landscape. Re-evaluating an established digital strategy requires a high degree of criticality — financial institutions must question what solutions truly serve their staff and customers’ needs, which are most effective, and how they can maximize those functions.

While this process can be time-consuming, it is also more conducive toward long-term success given how rapidly expectations for digital experiences change. The strategy that made sense 24 months ago may not be right today. Financial institutions can gain a competitive advantage by incorporating holistic evaluations of successful services into their existing workstreams to understand how to quickly replicate successes when integrating new solutions.

Institutions must ensure they have several solutions in place to meet evolving customer needs, the first being the ability for customers to send and access money in real time. According to a recent survey conducted by Javelin Strategy & Research, 75% of consumers say instant access to funds is important. Among millennials and Gen Z, that number was in the 90% range. By supporting digital transactions, financial institutions can provide seamless money movement solutions that allow customers to have instant access to their funds.

Similarly, there has been a rise in popularity of cryptocurrency trading and payments.  According to a July 2021 survey by the University of Chicago, 13% of Americans bought or traded crypto over the preceding year and about 60% of crypto investors began investing within the previous six months. This is the right time for financial institutions to evaluate whether the ability to buy, sell and hold cryptocurrency are a fit within their digital services mix.

Data from the Census Bureau showed a 75% increase in business applications between March 2020 and March 2021. Financial institutions can work to attract new small business customers by, for instance, offering them the opportunity to easily open an additional line of credit. Financial institutions can also offer their small business customers easy access to merchant services and point-of-sale solutions.

The final piece of this changing landscape is consumer expectation for one-on-one advice available on demand. Some financial institutions have leveraged new technological capabilities, including conversational artificial intelligence, to allow for personalized conversations. AI can also ease the burden of customer service inquiries, which have increased significantly during the pandemic, by facilitating responses to more straightforward inquiries through the use of chatbots and other tools.

Financial institutions can similarly leverage predictive technology to analyze behavioral data — such as how often a customer makes payments and how much they spend versus save in a typical month — and then provide alerts if there are deviations from established patterns. Before financial institutions can leverage transaction data in this manner, however, they must ensure their infrastructure is strong enough to be able to facilitate both data integration and data management.

Overall, as the financial world continues to add more complexity, financial institutions have an opportunity to take on a coaching role for consumers — utilizing data and technological capabilities to offer personalized, one-on-one digital experiences that provide consumers with convenience, insight and guidance.

Financial institutions must constantly evaluate and adapt their digital strategy, and evolve their offerings as consumer preferences change. By making the complex simple, financial institutions can help set their customers up for success.

Colleen Dabbs is director, solution consulting, at Fiserv.