Digital banking goes beyond payments and transactions made over the internet. The seamless experience is now complemented by hyper-personalisation. Today, digital banking users have higher expectations of their experiences, and banks have been thinking out of the box to find data-driven methods to personalise their advisory services to their customers. Customer experience is leading the digital banking industry, with targeted content gaining the upper edge in brand differentiation.
Think Netflix. Today, customers are used to curated playlists tailored to their interests and experiences. Many digital platforms now predict/tell you what you’re looking for, even before you know it yourself. Digital banking applications, just like any other applications, have been seen to jump on the bandwagon of incorporating a social media newsfeed ‘look and feel’ to entice users. Gone are the days when marketing banners offer generic recommendations. Digital banking users are looking for that extra personalised service for these curated ‘playlists’ to leverage the user’s habits and profile to empower them in their decision-making process.
How hyper-personalisation works (and will only continue to work better)
At this point, let’s look backward. Is hyper-personalisation an entirely new model? You’re right – it’s not. Personalisation can be traced back to the 1990s, when the rise of email marketing was seen as an opportunity for companies to personalise their marketing content. During the same era, banks could only use traditional marketing banners to promote their products and services to their customers and prospects. Today, with the infiltration of Artificial Intelligence (AI), hyper-personalisation offers a step into more targeted experiences. Vast amounts of data are collected from user behaviour – from spending habits such as the types of products purchased, typical time and location of purchase, and amount of expenditure – creating a strong database to support the realisation of a hyper-personalised journey. AI and Machine Learning, together with data analytics, are being incorporated into the back-end functions of digital banking to tailor content to the customer at every stage of their user journey.
AI and digital banking
Do you know that technology can also build a relationship with humans? AI is an ‘affectionate’ technology in the sense that it constantly learns from user behaviour to gain a deeper understanding of the users’ preferences and habits. It will then streamline the recommendations pushed to the users in their digital banking journey. For instance, you’ve planned an upcoming trip to Hong Kong. You have been watching the exchange rates on your digital banking application. The AI picks up this activity, offers you a hand in rate-watching, and sends notifications when the rate has improved, indicating a good time for you to exchange. It can even share insights about your spending habits and how much that would be equivalent in Hong Kong currency. AI, in a sense, is your invisible friend who is always on the lookout for your needs.
Once you’ve hopped on your plane, turned on airplane mode, landed in Hong Kong, and switched off your airplane mode, your intelligent digital banking application recognises the location change. They could instantly switch the currency of your digital banking card and drop updates on the financial landscape of your location. You no longer need to toggle between applications and their functions to figure your way around a service you may not use on a day-to-day basis.
Why hyper-personalisation wins
By offering such customised experiences to the proficient digital banker today who is always on the go, the demand for information and the empowerment in using it has increased vastly. Hyper-personalisation is no longer an option but an imperative in this digital economy. Not just because transactions have gone paperless but because we want the ability to control our wealth at our fingertips (literally, with just a couple of taps).
We have said goodbye to traditional in-app marketing banners that offer limited insights into our investments, savings, and expenditures. Hyper-personalisation has transformed marketing in the aspect of digital banking into a more streamlined experience that provides valuable information that empowers users in their wealth management.
What can hinder the implementation of hyper-personalisation
Traditional banks may face legacy technology and compliance challenges, including stringent customer protection and data privacy and security regulations. With countless digital transactions going through daily and a shift in customer behaviour, banks must now look at customer data as potential data mines. Of course, as we continue to live in an increasingly connected world, we can’t avoid conversations on data privacy, especially in digital banking. As such, banks and their customers must strike a balance on how they would want the data to be used. At the end of the day, this process must still prioritise the customers’ needs – including privacy.
As the saying goes, time is money. With hyper-personalisation, users can spend their time on other priorities while relying on AI, their ‘affectionate’ friend who will constantly watch over their needs without invading their privacy.
By Fraser Wilkie, Executive Director and Head of Design Asia, Synpulse8