By Reg Marrinier

The global pandemic has accelerated the rise of the digital economy, driving financial institutions to continuously contemplate the next big innovation to differentiate their service offerings. With huge stores of transactional data and client histories, financial institutions need to activate the value of data assets if they want to gain a competitive advantage in the banking world today.

What is hyper-personalization?
Outlined in the latest Deloitte report on the future of retail banking, Salesforce surveyed global consumers and came to the conclusion that 51 percent of customers expect that their bank will anticipate their needs and will make relevant suggestions prior to a direct contact. The general public has become accustomed to a certain level of personalization. Thanks to companies such as Amazon and Netflix who have perfected the art of “recommendations for you,” customers expect this level of tailoring to their individual needs to carry over into other industries as well. This is where hyper-personalization comes in.

In the report, Deloitte defines hyper-personalization as “harnessing real-time data to generate insights by using behavioural science and data science to deliver services, products and pricing that are context-specific and relevant to customers’ needs.” In other words, drilling down into client’s data to uncover insights into their preferences and behaviours can help generate recommendations for products that are suited to their needs and lifestyle, before they even realize what they need.

With increased consumer expectations and the continuous need to add value for clients, how can financial institutions integrate hyper-personalization into their business strategy? What’s the value to the organization and to the customer? For example, at BlueShore Financial, a boutique financial institution in British Columbia focusing on affluent clients with complex financial needs, we know that one of the biggest commodities our clients value is time. By using data and business intelligence to offer custom and expert financial advice, we’re ultimately helping our clients to save time while also moving closer to their financial goals.

Personalization is key to the success of financial institutions in years to come. Providing value to clients through deep, long-lasting financial advisor and client relationships, and helping to anticipate and address their complex financial needs is critical. An example at BlueShore is our client digital scorecard. Using robust analytics allows us to first turn data into information, and then into advice. The client digital scorecard provides clients with information regarding the digital habits and decisions of a pool of clients just like them, to show what next steps other similar clients have taken. The end result is creating not only insights, but actionable insights, for our advisors who can then provide advice and recommendations to their clients.

High Tech, High Touch
The pandemic has changed the way Canadians conduct financial transactions in general, and for some the change could be permanent. A 2021 survey by Pollara Strategic Insights showed that approximately 84 percent of Canadians say their experience during COVID-19 has made them more comfortable conducting financial transactions online. However, 93 percent of Canadians feel that financial institutions still need to make it easy for customers to connect with a person in real-time to get answers to their questions.
While many clients are open to doing their banking from home, they still want a personal touch of interacting with another human being for advice. Hence, we established that clients want interactions with their bank to be sophisticated, immediate, and very personalized.

While having strong data is crucial to be successful at creating a hyper-personalized experience, just collecting client data is not enough. You need to know how to use it. This involves ensuring your organization has employed or up-skilled staff on how to sort, categorize and report on the information in order to make it useful. Being able to execute hyper-personalized advice and products for your clients is highly dependent on your Data Analytics team taking a client-centric view and knowing your business inside and out. Truly understanding the business from a practical standpoint and understanding clients’ needs and wants is what will make your program successful.

You also need to strike the right balance between people and technology to make hyper-personalization work. This concept is a part of what we call a “high-tech, high-touch” approach. It is important to constantly look at new successful ways to blend humans with machines to enhance or deepen relationships with clients with the use of data and technology.

For example, when you have determined the life stage of a client, or their recent behaviour indicates that they may be looking at mortgage rates or investing in a TFSA, it is imperative that someone from your institution reaches out to them with the right product at the right time, either through an email, a phone call or during a sit-down meeting with their advisor. Ideally, the concept of hyper-personalization occurs in real time to provide the most value and effect. After all, receiving an email about applicable mortgage rates a month later, may not prove to be beneficial or impactful.

How to overcome obstacles
So why aren’t multiple financial institutions making hyper-personalization a top priority already? It may be because some larger banks tend to focus on volume and a one-size-fits-all approach, rather than addressing individual client needs. However, a financial institution may gain more client trust, and a larger share of wallet, if it can cater to individual client needs.

There are also some specific obstacles that might prevent financial institutions from adopting hyper-personalization. Examples include organizational silos, lack of data, or a lack of structured data, poor Customer Relationship Management (CRM) systems and data capture, and lack of executive and staff support.

However, each of these has its own solution. In the case of silos and different data sources, data has to flow between silos and easily throughout the organization with a single source of the truth. For example, the numbers used by the Finance team need to agree with the numbers used by the Sales team presuming of course the question is the same. In other words the right answers and the same answers to questions posed by various users. The best way to achieve this is by creating a strong, centralized Business Intelligence team with a decentralized, empowered end-user model.

In order to capture data and analyze it successfully, you need a strong and reputable CRM system that is updated and maintained regularly, and that your tech teams and other employees understand how to use. Worse than having no data at all, is having outdated data. Therefore, having an engaged client facing team is critical. Accurate data capture has to be an essential part of everyone’s role in the organization. It starts from those first interactions that clients have with your front-line employees. Information must be captured during those personal interactions, otherwise, you will not have strong data to pull from later. To “learn and capture” needs to become part of the organizational culture, right from when brand-new employees are onboarded and trained on the frontline, and up to support from the top executive level.

The future arrived faster that we all anticipated in 2020, and for financial institutions to stand out from the pack today, they must be agile, digital, and ready to get hyper-personalized. Though it isn’t a quick fix or fast project, the use of data and the goal of getting down to providing “insights of one” needs to be an ongoing journey supported completely through all levels of your organization.

Reg Marrinier is Chief Retail and Business Officer at BlueShore Financial. He oversees their Solution Centre operations, Marketing, Business Group and Wealth Management. With over 20 years of experience in the financial industry, Reg has been instrumental in developing BlueShore Financial’s banking, client, and investment strategies.

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