In the world of finance, banks and credit unions play a pivotal role in our lives as guardians of our financial well-being. But what truly sets a great financial institution apart from the rest? It's the ability to balance outcomes for all parties involved in a way that is clear, fair and transparent, thus inspiring trust. When accountholders thrive, banks and credit unions thrive, and vice versa.
In this new, hybrid world where human relationship building is a complicated combination of personal and digital touch points, this win-win outcome results from investing in cultivating both types of relationships. This in turn involves the smart utilization of data and AI so that financial institutions can create personalized experiences that are also authentic and lead to long-term loyalty and profitability.
Trust is the cornerstone of any successful relationship, and it's especially vital in the world of finance. Consumers entrust their hard-earned money, financial aspirations, and security to their chosen financial institution. In return, they expect transparency, reliability, and fair treatment. Financial institutions must go beyond mere transactions and actively build trust with their customers. This means offering advice and solutions that genuinely benefit their consumers’ financial wellbeing. When customers have faith in their bank or credit union, they are more likely to stay loyal, even in the face of market fluctuations or competitive offers.
The concept of a mutually beneficial relationship in banking is simple but powerful: both consumers and financial institutions must prosper. When consumers succeed in reaching their financial goals, they will grow that relationship with their bank or credit union. This success translates into achieving more financial milestones, which lead to additional financial products and services. And, when financial institutions thrive, they can continue to offer competitive products, maintain a stable financial position, and provide excellent customer service. The key is to find the equilibrium where both parties benefit, creating a symbiotic relationship.
Few industries compare to banking in terms of the information available about customers. Financial institutions possess a wealth of data on their customers' financial behaviors, preferences, and aspirations. Moreover, this data is considered “zero-party data”, which refers to any data shared with a brand willingly by individuals through setting up their account profiles or in answers to surveys. Using this data and combining it with AI/ML models can help the FI to harness and unlock its hidden value that banks and credit unions must then use responsibly to create personalized experiences while also building trust. AI can analyze data to create tailored experiences for each unique digital user. This personalization makes interactions more meaningful and relevant, increasing customer engagement by providing advice and recommending products and services based on the customer's financial situation and goals. Timely financial advice and offers can help customers make informed decisions. With these tailored communications, accountholders know that their bank or credit union genuinely understands them and cares about their financial success. Thus, they are more likely to engage and share their broader financial aspirations with their FI.
The flip side to the responsible use of data and for personalized user experiences can have some serious consequences. Some of these include:
- Not using the data at all which results in this negative consumer reaction, “I bank with you – do you know me at all?”
- Superficial use such as a repeated use of a person’s first name, with no relevant offers or advice which can elicit a similar negative emotion.
- Using third-party data can potentially result in inaccurate, obsolete and insensitive communications which can lead consumers to believe their FI has no real knowledge about them nor do they care.
- It can also violate their privacy which is an absolute no-no!
- Some solutions tap into individual online behavioral data which goes to the other extreme and can seem downright creepy.
Which all leads back to the initial premise of the balance of power between trust and data, and how critical this is.
To make the path to personalization effective, financial institutions can leverage technologies like DeepTarget's Digital Experience Platform. This intelligent solution streamlines zero-party data integration with AI/ML models and enables banks and credit unions to create authentic and meaningful personalized experiences across all digital channels. The power of DeepTarget's DXP is in enabling financial institutions to deliver smarter and more engaging content digitally, at scale. Financial institutions can utilize this in combination with personal touch points to greatly strengthen their accountholder relationships leading to deep-rooted loyalty and profitable long-term relationships.
