With mobile payments poised to reach a tipping point, banking and insurance have truly grown into the digital age. The finance industries and their customers have been slower to fully adopt digital technology, and for understandable reasons. Fears about digital privacy and security are natural for individuals engaging in any type of e-commerce, but these concerns are heightened when dealing with personal finances compared to just buying clothes or booking a hotel.
A recent study by Mindtree confirmed this. Among 2300 global consumers who use online banking or insurance products, 42% are concerned with online payment and fraud, 37% are concerned with privacy and security, and 31% dislike having a less human experience—all significantly higher than responses when customers were asked about these issues in the retail, entertainment and travel industries.
But the study also reveals what may be the best way to turn the tide—with an advanced, robust personalization strategy.
Consumers Will Invest More With Personalized Service
In addition to surveying global consumers, the survey also asked questions of 180 decision-makers from banking/insurance companies across the U.S., Europe and Asia/Pacific, with at least 2000 employees. The results show personalization to be highly effective:
- 77% of banking and insurance consumers say that customized promotions encourage them to buy products and services they have never purchased before
- 68% of companies say that more targeted promotions are the key driver of improved online sales over the past 12 months
- use of mobile apps (an extremely personalized medium) for banking/finance will double in the next three years, from 9% to 20%
The curious counterpart to these findings it that the level of investment by the companies we surveyed doesn’t match the potential. Only 38% of decision-makers in banking and insurance say their organizations are investing significantly in personalization to improve their customers’ online buying experience.
Unlocking Personalization’s Full Potential
The truly unfortunate thing about the relative lack of investment in personalization is that so much more could be done. Many of today’s approaches fall flat because companies keep different kinds of customer data in separate silos that aren’t integrated. If companies were to break up these data silos and consolidate information from all digital touch points into one system, they would be able to create context-weighted personas of customers via personalization algorithms.
Such a system allows companies to automatically engage customers across multiple channels, formats and devices. This is the holy grail of personalization: delivering the right offer to the right customer at exactly the right time—in a format tailored to that person’s physical or virtual location in the buying journey.
The good news is that banking and insurance companies aren’t afraid to dive into new digital endeavors. In the survey, when asked whether they consider themselves to be “pioneers” in adopting or investing in digital technologies, 58% said yes. Knowing that a majority are already in transformation mode is a great start.
To read more about Mindtree’s newest study, “Winning in the Age of Personalization,” visit the study’s web page, where you can check out the full report, infographic and eBooklet.
Radha heads the Digital Business group at Mindtree, which includes Digital, Mobility, DAS and SaaS packages. She is responsible for designing and delivering broader digital solutions for Mindtree’s clients globally. During her tenure, she has played a decisive role in laying out the strategic roadmap to transform Mindtree.