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How much is too much personalization?

With the vast amount of banking options available today, it is no surprise that consumers want everything in real-time, personalized to their every demand and if they don’t get it, they simply move on to the next institution that can.

But what price are people willing to pay to get this personalized service and instant satisfaction from their financial institutions? How much of their personal information are they willing to share?

The only way financial institutions can respond to this demand and personalize the customer journey is to know as much as they can about you: your habits, preferences, relationships.  They even try to anticipate wants and needs – maybe suggest a retirement savings for anyone turning 18 or recommend a 30-year mortgage every time someone posts a picture of an engagement on social media.

So, are consumers really willing to give up all that data just to have a better experience?  It seems they are.  They freely post pictures, status updates and opinions on social media and websites, and they openly share demographic data leaving behind a digital footprint heard round the world.

This comes down to consumers wanting to be treated like individuals.  And wanting to have unique experiences. 

 

The savvy consumer

Today’s consumers are savvy about their data.  They know when they share direct or via social networks, that data will be used – both targeted at them individually and at an aggregate level for segmentation.  They need to know they are in some level of control and that the data will be used for good not evil.  And for the most part, they trust that it is secure.

Now the tricky part: how can financial institutions take advantage of this free sharing of data.  How can they sift through the vast amounts of data to find trends, connections, and indicators to provide the right level of personalization?  As more unstructured data from social media, video, images, webchats, geospatial data and others gets dumped into a data lake such as Hadoop, the ability to gain insight slips away.  What once was a problem of not having enough data to identify trends or properly do segmentation has turned into a situation of having too much information to make any sense of it.

 

Customer 360

The answer lies in the ability to synthesize all data together into an intelligent customer 360.  This is different than the traditional master data management profiles generated over the past 10+ years which were limited to structured data and exact matches.  Now the true hidden nuggets of insight lie in fragments of data that can be stitched together.

If marketers, customer service reps and personal bankers have a better understanding of customers – identify high net worth individuals, recognize risk of customer churn, provide targeted offers – then personalization will be done right.  And banks will grow and retain the right customers.

 

 

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Comments

  • CU Employee Community Chair

    It's a very challenging blog post, Jennifer — thanks for sharing it!

    I tend to agree that a segment of of our members (large? small?) equate personalization with relevance and will embrace it as quickly as we can deliver it. They're happy if not anxious to provide data if we're willing to curate and leverage it. Others, though, maybe not so much. I can picture some folks drawing a line somewhere in the middle between "no marketing at all, thank you" and unfettered access... maybe letting us mine their CU financial data without concern, but drawing the line at monitoring social media or smartphone geo-location.

    The irony? I haven't heard many credit unions talking about personalizing around their application of personalization. Most programs start with an assumption that everyone will be enthusiastic about personalized communications, not giving much thought to opt-ins or opt-outs. But doesn't it make sense to situate members in the driver's seat as to what data they're comfortable having us use in the delivery of service to them? With the big movement in the EU around GDPR, how long until U.S. consumers value similar control?

    They're issues I'm certainly giving thought to. Thanks, again, for raising the issue for discussion!

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