When it comes to marketing in a modern age and keeping up with emerging technologies and shifting consumer trends, financial services has often lagged behind other industries. These days, people expect a tailored customer experience from the brands they do business with – one that is both helpful and enjoyable. More and more companies are providing personalized experiences across digital and in-person channels. As more industries adopt personalization, the more outmoded the financial services industry becomes.
According to Digital Banking Report, 84% of financial services professionals consider it “very” or “extremely” important to know their customers, yet they aren’t taking big steps to implement these strategies. Marketing to people as individuals with targeted, personalized experiences can no longer be an afterthought or just a suggestion; it’s a best practice. Don’t just take our word for it though – check out these other statistics from experts in this financial services stats round-up.
Financial institutions (FIs) are prioritizing the customer experience
The customer experience, especially in financial services, is critically important for company growth and customer lifetime value. Most financial services professionals recognize the importance of the customer experience and prioritize it.
- 89% of marketers compete primarily on the basis of customer experience [Gartner]
- 55% of bankers plan to increase spending on customer experience initiatives this year [CSI]
- 79% consider it “very” or “extremely” important to deliver guidance to customers in real time [The Financial Brand]
Consumers demand personalization across channels
Consumers expect personalization as part of a good customer experience, but just personalizing your website is not enough. The customer experience does not and should not stop there — especially now that 62% of Americans cited digital banking as their primary method of banking. Personalization has to be part of the entire journey with in-app, mobile, desktop, and in-person experiences all being tailored to each individual.
- 58% of consumers engaged in cross-channel shopping, the act of researching a financial product via one touchpoint (e.g. branch, website, phone, mobile app) and applying for it in another [Forrester]
- 41% of U.S. consumers are loyal to brands that offer them the opportunity to personalize products to create something that is bespoke to them [Accenture]
- 42% of consumers listed not providing live/real-time customer service support as a reason for breaking up with a brand [Talend]
Yet FIs are falling short of delivering a better customer experience through personalization
From the stats provided above, it is clear to see that FIs understand the importance of personalization. However, while there is a great deal of discussion in the industry around the importance of an improved customer experience, only 11.6% of organizations’ budgets were allocated to this objective. This shortcoming is noticeable with over a third of millennials currently describing their bank in unflattering terms.
- 70% of consumers consider their relationship with their bank to be transactional in nature, rather than relationship driven [Accenture]
- Nearly half of millennials (46%) said their bank does not send marketing materials that are relevant to a future financial need [The Financial Brand]
- Two in five millennials also complain that the offers they do receive aren’t personalized [The Financial Brand]
- Roughly 40% of all but the very largest financial institutions consider themselves “static,” meaning they offer no personalization within their applications (see graph below) [Digital Banking Report]
Some final thoughts
Real-time personalization is not only what customers want, but it's also what they expect. In fact, millennials are two to three times more likely to switch banks if they are unhappy. This should make FIs pay careful attention considering this segment now numbers 1.8 billion globally, and it is expected to have a lifetime value of $10 trillion.
These days, consumers don’t just compare a company against its competitors to set their expectations of service. They look across industries. FIs need to do this too — looking to other industries to understand the value and importance of personalized experiences. Real-time personalization will help FIs accomplish their main priorities: cross-selling, deepening customer relationships, and increasing share of wallet. If you would like to read more, check out this helpful guide we prepared: The Personalization Imperative: Insights and Examples for Financial Services & Insurance.