Banking institutions have always had a large amount of data on their customers, and over the years this information has been used by the industry to generate new financial products, calculate risks, detect fraud and guide their commercial and business strategies.
Today, in a hyper-connected era in which digital customers generate more and more data and are more demanding, it seems obvious that institutions use this information to improve their product and service offerings. However, we are a long way from seeing this in today's digital banking, as very few are leveraging this information to create hyper-personalized experiences.
This is being talked about as the future of digital banking.
At Rizeapp, it has become our present. Through hyper-personalized experiences, we seek to offer products that are tailor-made to the specific needs of customers at specific times to enhance their experience with a close-up, personal approach.
But, what exactly is "hyper-personalisation" when we refer to online banking, and why is it becoming increasingly important?
According to AWS's Banking Trends 2022 research, 50% of digital banking consumers expect their bank to provide a highly personalized experience.
By definition, hyper-personalization is the process of using AI and real-time data to display highly targeted products and content to shoppers.
Applied to online banking, hyper-personalisation is a consumer-centric approach to digital banking that leverages behavioral data science and the use of Artificial Intelligence (AI) to deliver relatable products and services to consumers.
McKinsey’s research report, ‘Marketing's Holy Grail: Digital Personalisation at Scale’ claims that personalization can reduce acquisition costs by up to €50, increase revenue by 5-15% and increase the efficiency of marketing spend by 10-30%.
Hyper-personalisation helps to create a more personalized customer experience, arguably more appealing than generic offers. It also gives the bank a better understanding of what products and services its customers are likely to be interested in, which can help retrieve key information for future product development.
Banks may use different data from customers to personalize their experience, including:
In addition to the obvious increase in revenue, incorporating hyper-personalisation in online banking is necessary because of the benefits it offers:
Here is a list of examples of how hyper-personalisation can be leveraged in the banking industry.
This is the kind of personalisation we encounter when we open Netflix and see a number of options in the catalog that “we might like". This personalized style is starting to shape the future of online banking too.
It consists of displaying products based on a customer's real-world context. For example, offering products related to those previously purchased, taking information from their purchase history or even offering a product refill.
Rizeapp is among the first financial institutions to embrace this. With real-time data and artificial intelligence, we can perform predictive analytics to determine what customers will want in the future by looking at past and current data patterns.
Current banking apps mainly offer convenience and speed across generalized financial products, like payments facilities. Going far beyond this, Rizeapp learns and predicts client needs and goals, to generate meaningful, actionable insights that guide the customer to a better financial status.
These are offers made on a one-off basis that resonate with individual customer buying patterns. With sufficient data to accurately drive personalisation, financial institutions can now segment customers for promotional offers based on the customer's buying cycle.
With Rizeapp, customers can expect suggestions aimed to help them realise long-term saving goals, develop and diversify investment skills, or to simply improve their financial portfolio with, ie., a currency hedging idea; tailored specifically to their customer’s financial profile. So, if a customer visits the Starbucks franchise a lot, we can offer them to invest in shares of the company.
Creating omni-channel experiences
Our omni-channel approach aims to integrate data from all of the available channels for a seamless financial experience.
Rizeapp’s enhanced omni-channel data platform extrapolates current and future scenarios via how, when, where and on what financial transactions are made. It then constructs practical, personalized “insights” with relevant market information, learning opportunities, and actionable wealth-management ideas. Customers will be able to develop their wealth management experience across multiple touch points, but in a unified way, which helps reinforce brand permanence and increases overall engagement.
In providing financial management services, bankers can use data collected on customers spending habits, repayment behavior and other interactions to develop unique profiles.
This information can be used to offer specific content and products that are better tailored to each customer's needs.
Learning how to manage your money is essential to achieving financial well-being. In other words, having your finances under control, a basic pillar to help you achieve your work or personal goals, but also, according to experts, the key to feeling secure in the face of certain unforeseen events that may arise throughout your life.
Rizeapp has been designed as the perfect app to improve your money management and, therefore, achieve financial wellness. The application features an AI financial coach that analyzes and understands your financial behaviour, and helps you achieve financial wellness and increase your purchasing power.
Conclusions
Hyper-personalization is the future for banks, but also for their customers. It offers a wealth of benefits that can be broken down into different specialized services.
Rizeapp is a pioneer in offering hyper-personalized services in its app to increase financial fitness. Not only does it have services that help you improve your money management, but it also offers you a single point of access to all your financial life.
Want to try it out?