The Importance of Personalization for Digital-Only Financial Services Customers

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The Importance of Personalization for Digital-Only Financial Services Customers

August 29, 2017 by

The typical digital consumer owns 3.64 connected devices on average. The percentage of Americans that own a smartphone now reaches 77%. And eMarketer estimates US adults will spend 3 hours, 17 minutes a day using a mobile device this year. Clearly, digital is an important channel for marketers across industries. But just how important is it for financial services companies in particular? For the first time, the data shows that among financial services customers, a preference for digital-only interactions now surpasses omnichannel.

A recent PwC report found that the digital-only banking customers segment has grown dramatically in the last five years. In 2012, 27% of customers were interacting with banks via digital devices only. Now that number has grown to 46%. Meanwhile, the percentage of customers that interact with banks in both physical and digital channels (omnichannel customers) has shrunk from 57% to 45% (see graph below).

personalization for digital-only financial services

So what does the rise of this digital-only preference mean for financial services marketers? Here are some of my takeaways for marketers facing this trend.

Marketers Must Master the Digital Experience

While the growth in digital channels does not mean that physical channels such as branches or call centers are dead, it does means that as a financial services marketer, your digital experience is more important than ever. As more and more customers opt to interact with you solely in the digital world, they will not have the benefit of speaking with a real person to provide a good customer experience. Your digital channels will need to provide that experience on their own.

Providing highly effective customer experiences is not necessarily easy, as digital-only customers have high expectations. PwC refers to digital-only customers as “omni-digital.” They often prefer to seamlessly switch between mobile phones, PCs and tablets to interact with their banks. The interactions these customers have with companies in other industries has set their expectations for how their experiences with their financial institutions should be. These customers expect a digital experience that allows them to find what they are looking for easily and to quickly accomplish their goals. As PwC explains in the report, “The omni-digital customer who just ordered a pizza on her smartphone may ask herself why banks make it so hard.”

Effective Segmentation and Targeting is Key

Many financial services marketers segment their prospects and customers based on demographics, such as age or income level, which can often be used as a proxy for a person’s needs. For example, PwC points out that the greatest mobile adoption falls in the 18-24 year old segment and that mobile usage falls off as age increases.

That said, each individual is unique. Thus, channel preferences and usage can vary greatly between age groups. Beyond channel usage, each person has his or her own preferences, attributes and behaviors. It is critical to segment and analyze your customers across these dimensions as well. For example, you can target visitors by lifecycle stage (new visitor, returning prospect, returning customer) or by content preferences (for topics like financial planning, life insurance, etc.) – just to name a few ideas. By segmenting your audience solely based on demographics, you miss the opportunity to be uniquely relevant to each person based on other factors.

Personalization Should be the Linchpin of Your Strategy

So how can you provide a great digital experience that appeals to each person across your digital channels? Personalization. With personalization, you can surface relevant content to key segments and to each individual person, display the right CTAs to guide people through their research, cross-sell products based on customer intent, and more.

Effective personalization is based on a deep understanding of each person’s preferences, affinities and behaviors. With this deep understanding, financial services marketers can create smarter segments based on more than just demographic data and leverage machine-learning algorithms to target unique experiences at the one-to-one level across channels.

Looking Ahead

Most financial institutions believe they are relationship-driven organizations, yet according to Accenture, 79% of consumers consider their relationship with their bank to be transactional in nature. And since nearly a majority of their customers now interact with them solely through digital channels, financial services companies can no longer rely on the human element to create solid relationships with customers. They need to ensure that their digital channels can provide a personalized experience to show their customers that they know, understand and appreciate them.

To learn more about how Evergage can help financial services company personalize their customer experiences, request a demo today.

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