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Data-Driven Personalization: How to Increase Market Share and Generate Revenue

The New Competitive Landscape

With the rise of digital alternatives, financial services organizations are losing customers who would’ve been taken for granted in previous generations. They stand to lose market share and see revenue fall. But these institutions can attract and retain these customers through the kind of data-driven personalization that fosters trust and loyalty.

Most banks have some, but not all, of the necessary personalization capabilities and underlying technology already. However, no organization can be great at personalization if they only have some parts of the puzzle.

“New problems require new solutions. To achieve true personalization, an end-to-end set of business capabilities, underlying technology, and relevant data is critical. Once this comprehensive set of capabilities are in place, financial services organizations can properly and more accurately engage with customers, create value for them and ultimately secure new revenue streams.”
Brian Henning, Salesforce Practice Lead - Financial Services at Publicis Sapient

Stronger personalization correlates with better customer relationships, greater return on investment and increased revenue. Research from Epsilon found that 80 percent of consumers are more likely to do business with a company when it offered personalized experiences and 90 percent said personalization is appealing. According to a study from Monetate and WBR Research, 93 percent of businesses with advanced personalization strategies increased their revenue.

Why personalization is nonnegotiable

Brian Henning, Salesforce practice lead for financial services at Publicis Sapient, explained that four factors are driving the need to increase personalization: higher customer expectations, massive new datasets, deprecation of third-party cookies and data privacy regulations.

With intuitive platforms, prominent technology companies have raised the public standard for a positive customer experience. Facebook, Amazon, Apple, Netflix and Google, known collectively as FAANG, understand their customers and anticipate their needs. Accustomed to seamless service across multiple channels, today’s customers expect the same from other key areas of their lives, namely where they entrust their savings and investments.

An age of alternatives

Established banks are ultimately facing a loyalty crisis as digital challengers offer platforms and services that are highly engaging, easy-to-use, and always accessible via numerous channels and devices.

Will you change your bank in the next year?

Publicis Sapient’s Digital Life Index (DLI), a survey 9,300 people from 12 countries published in the summer of 2021, found that 37 percent of respondents are considering or planning to change their financial institution in the next 12 months.

14%
will change their financial institution
23%
consider changes to financial institution

According to the BAI Banking Outlook, 83 percent of people trusted their primary bank or credit union most to handle their banking needs in 2019. But a year later, that number fell to 52 percent relative to nontraditional providers.

A customer satisfaction survey by the Competition and Markets Authority in the UK found that fintech customers are far more likely to recommend their current account provider to friends and family. But Nationwide Building Society, a British financial institution, made the top five showing that it’s possible for traditional financial services organizations to earn top marks for customer trust – they just need to prioritize and enable a personalized and relevant customer experience.

The DLI found that older age groups feel more confident managing money online than younger generations do. Fifty-four percent of respondents 65 and older feel confident or very confident, whereas only 28 percent of respondents 18 to 24 feel the same.

Confidence managing finances online by age group

If current trends hold steady, traditional companies offering financial services (banking, wealth management, investing, insurance, etc.) will continue to lose customers to digital challengers.  This translates to decreased revenue and market share, most likely on a permanent basis.

The Cookieless Future

In response to growing demand for user privacy, regulatory agencies and private companies are taking steps to limit data collection. As cookies become less relevant, identifying, consolidating, and leveraging data will be more important than ever in achieving true personalization.

 It can be difficult for businesses to know where to begin with data-driven personalization (e.g., beginning with email outreach or improving the website). But this doesn’t need to be the case.

Henning said there’s a logical sequence of activities to get personalization right.

Brian Henning
Brian Henning
Salesforce Practice Lead, Financial Services, Publicis Sapient

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