Bring Your Own Persona to Banking

“Bring Your Own Persona” (BYOP) is a term coined by the Wharton School of Business to describe how customers in the digital age bring a unique profile and set of behaviors to every circumstance. Morgan Beard, Strategic Marketing Director at TSYS, and Bruno Courbage, Senior Director of Product Management at FICO, have applied it toward the creation of a formula for financial institutions to engage with consumers on a deeper level of personalization. They shared with PYMNTS their thoughts on why old methods no longer hold water, what they turned up in their research, and how institutions can best put BYOP into practice moving forward.

Why are traditional portfolio segmentation approaches to customer engagement no longer enough?

BC: In the past, financial institutions have been segmented by socio-demographics. It was easy; it worked; decisions were made, really, quite judgmentally. Then, we added KYC, or Know Your Customer. It worked a little better and it fulfilled certain regulatory requirements, most of them related to fraud.

But we can’t get away with that anymore. Today, everybody is digitally connected; everyone has access to mobile devices, social networks, et cetera. We really need to consider digital ability and trust or openness to sharing data as new measures.

At their core, digital users are individuals who bring a unique digital profile and set of behaviors to every situation. We call this new world “Bring Your Own Persona” –BYOP, for short. The term was first coined by the Wharton School of Business, and it requires a fundamentally different way of thinking about customers.

It used to be assumed that people would exhibit predictable behaviors in both their public and their private lives based on their socio-demographics, allowing firms to use classic segmentation techniques for targeted interactions. Those models are no longer sufficient. Almost all demographics have access to mobile, social and wearable devices; what distinguishes them is their savvy in how they use these tools and their comfort levels with the data they are willing to share in various scenarios.

That’s the idea behind BYOP, or Bring Your Own Persona: the need to identify new segments by their digital engagement.

TSYS did some primary research in this area. What were the findings?

MB: To give a little bit of background, I always like to share a brief story about my grandmother.

A couple of years ago, she was given an iPad as a present. It was the first computer she’d had in her 80-some-odd years. What I love about it is the user-friendliness: with a few swipes of her finger, she’s all of a sudden FaceTiming with her 6-year-old great-grandson. That little vignette kind of reiterates the point that Bruno made – that we’re all members of the digital age, now.

I love the story, and I love my grandmother, of course…but a sample size of one lovely lady on the Canadian border of New York simply won’t work. Because it won’t, what we’ve done at TSYS is explore this idea more deeply by surveying consumers in the U.K. and Germany – over 1,000 people, in fact, between the two countries. We asked them payment-specific questions to understand not only consumers’ attitudes and preferences but also their behaviors – that is, certain actions that they’ve taken in the past year. We focused particularly on specific topics like mobile, social media and alternative payments.

The results surprised us, frankly. Digital adoption does not differ by those old standby segmentations of age, income and education…and when we look at things through that traditional lens, the differences are indeed rather insignificant, now. We need a new approach.

In the new realm of Bring Your Own Persona, the conclusion that we’re drawing is that we need to characterize digital personas along the two dimensions that Bruno had mentioned: digital capability and trust.

How should issuers pursue BYOP?

BC: That’s an interesting question. BYOP is really a journey. It begins – and this is very important – with a very, very clear understanding of the overall relationship that you have with a customer. Then, as Morgan mentioned, there are two areas to deliver against: digital enablement and trust. Improving customers’ digital capability requires that issuers make their applications easy to use…and the data is telling us they’re doing a good job at that. There was a survey run by Synergistics that revealed that two thirds of respondents are either “comfortable” or “totally comfortable” with self-service applications that support banking activities.

Then there’s building trust. There is always going to be a small population that doesn’t have faith in digital systems – and the recent, very visible security breaches haven’t helped that. We call that group the “Paranoids.” Aside from that segment, building trust is absolutely critical and entails providing clear value to the consumer in exchange for the data that’s being collected.

The 2015 TSYS U.K. Consumer Payments Engagement Survey tells us that 69 percent of early adopters found the ability to self-determine the frequency of offers from their bank’s merchant partners as either “valuable” or “very valuable.” Issuers will need to respect that to maintain trust. FICO’s own research tells us that only 9 percent of people think that their primary bank sends them too many offers.

There’s an opportunity, here, for issuers that can interpret omnichannel data and have a clear understanding of their relationships with their clients. These issuers are going to be able to make strategic decisions about which offers to present the customer and when, and that’s really going to help improve customer engagement as well as the bottom line.

How can our audience learn more about a BYOP approach to customer engagement?

MB: Bruno and I have written a white paper introducing the topic and providing some prescriptive advice on how to gain success with the BYOP approach. We’ll also be co-hosting a live webinar on June 9.

To download the complete white paper from TSYS and learn all the details of BYOP, click here.

To register for the webinar, “Driving Customer Engagement Using ‘Bring Your Own Persona'” (Tuesday, June 9, at 10 a.m. EST), click here.