Building customer trust and loyalty remains a challenge for banks in the digital realm. Historically, customers would visit the branch to conduct their financial business, knew their banker by name and entrusted them to provide tailored and thoughtful advice. But how can banks create comparable intimacy via digital channels?
Exhibiting a deep understanding of a customer’s financial situation and aspirations has been proven to build trust.
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A new paradigm of hyperpersonalisation
Today, banks have the ability to process vast amount of digital transactional data, which allows for new types of analysis of customer financial choices. With artificial intelligence and big data tools, banks are entering a new paradigm of hyperpersonalisation that can segment customers beyond standard demographics like age, gender, wealth level and location.
In addition, behavioural science can help banks understand trends underpinning customers’ financial decision-making, such as taking out a mortgage versus renting, or buy now, pay later versus save now, pay later.
Until now, behavioural design in financial services has mainly been used to maximise consumption or engagement metrics. Using choice architecture, or the way that choices are presented to people to influence their decisions, banks have positioned their products and services through personalisation and other methods to promote cross-selling and upselling, and generate greater profits.
But what if we turned this concept on its head and applied behavioural science tools – nudges, gamification, personalisation and behavioural design – not to push people into spending more, but to help them spend mindfully, save consistently and build long-term financial well-being?
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By GlobalDataReimagining choice architecture
At the Future Finance Fest (3f) conference in Vilnius, which brought together academics and start-ups to bridge the gap between research and real-world banking, I participated in a panel discussing the benefits that reimagining choice architecture could bring to the bank-client relationship, fundamentally changing the financial services world for the better.
Hyperpersonalisation, for example, could be used to enhance long-term financial objectives. If a customer is spending their entire salary each month, their bank could identify a dangerous pattern of overconsumption and propose solutions to help them save more, instead of accessing credit which could push them into a debt spiral.
I believe that banks should be optimising not just for short-term transactional engagement, but also for long-term retention and customer satisfaction. A sustainable approach would drive a high level of trust and engagement, as well as bring in more business in the future. Trust fosters loyalty and loyal customers are more likely to encourage their children and wider family members to become customers as well, acting as a brand advocate for the bank within their internal and external social circles.
The next generation of digital banking should create tools that strengthen financial resilience and design services that deliver both commercial success and customer well-being. In this context, hyperpersonalisation can help to build a relationship where banks are truly financial advisors and educators, incentivising balanced consumption and long-term financial goals.
I believe that this presents an opportunity to bring the bank much closer to the customer, not just by understanding what product they potentially might want to buy today, but in a much more intimate way similar to how bankers previously engaged in-person with clients.
Plumery’s mission connects directly with this approach. We are working with researchers and financial institutions on defining the capabilities our platform needs to provide for banks to drive that type of hyperpersonalisation. By modernising the experience layer, we can give banks the ability to build personalised, trusted digital journeys that are not only profitable but also ethical and impactful.
