FIs Must Personalize Digital Banking Experiences

Financial institutions must change how they use their data in order to provide a more personalized banking experience, NCR President Doug Brown explains in the new PYMNTS eBook, “What’s Your Plan? Payments Strategies for a Strong 2022 Finish.”

Consumers have been migrating to mobile devices as their primary channel to conduct banking transactions for years. But with the onset of the pandemic, banking digitally was the only way. And the preference for digital is here to stay, forcing banks and credit unions to accelerate transformation roadmaps to keep up with consumer demands and expectations for digital-first experiences.

Now, as we enter times of financial uncertainty and instability, for many consumers, the digital channel only becomes more critical. Consumers will be watching transactions closer, transferring money between accounts more frequently, and changing their spending habits if they haven’t already. This presents a great opportunity for financial institutions but can also pose a serious risk of attrition and a bad reputation if they get it wrong.

According to an NCR survey, 60% of U.S. banking consumers want their primary financial institution to provide personalized financial advice. They also trust their banks and credit unions with their data. But, to successfully deliver that personalized experience, financial institutions need to do more with the data they’re already collecting to provide consumers with relevant, timely support. And providing this type of support can’t just be part of a financial wellness strategy to grow loans or savings accounts; it must be a key component of the broader customer experience. Financial institutions need be looking at their transactional data for spending patterns and how those are changing as budgets tighten. 

To provide this deeply personalized experience and help consumers build financial proficiency, financial institutions must change how they use their data. They need to go beyond looking at demographics and significant life events to try and predict their next step, such as the need to purchase a home, secure a loan or save for retirement. Financial institutions need to understand their customers and members better individually. On the one hand, there are the members of Generation Z and the young millennials who have never really experienced financial uncertainty quite like this. On the other hand, there are the baby boomers and members of Generation X who are approaching retirement and worried about how the financial climate may impact when and how they can retire. Each consumer’s financial needs are incredibly different, so a one-size-fits-all approach to offering financial advice won’t cut it.

The information gleaned from transactional data, spending habits and even the path taken on the mobile app can provide an abundance of insights. As we push forward in Q4 and into 2023, banks and credit unions must make this dire need for personalized and individualized service a top priority. For many, the tools and data to do so are right at their fingertips. And the ones that can turn this consumer challenge into an opportunity will build a lifetime of trust and loyalty, building more profitable long-term relationships.