Banking – hyper-personalised and redefined

THE rise of artificial intelligence (AI) has hogged the headlines over the past year. However, its most profound impact has largely gone unnoticed – how it’s quietly changing the way brands interact with us, especially through hyper-personalisation. Imagine brands treating you as a unique individual, not just another data point. By using details such as your purchase history and browsing habits, companies create experiences tailored specifically to you. This goes beyond simple demographics, and offers products, services, and content that resonate with your interests, needs and wants. And this isn’t science fiction; it’s happening now.

This transformation is driven by hyper-personalisation with its unique ability to understand and anticipate each customer’s preferences. By harnessing the power of data and machine learning and making it accessible to business stakeholders, companies can revolutionise their customer interactions and engagement.

We all know that customer service is key to any business; but in banking, where trust and long-term relationships are paramount, it is even more critical. A recent US Retail Banking Satisfaction study found that 78 per cent of banking customers prefer personalised support, and yet less than half of the banks actually provide it. Given the fierce competition from fintechs and digital banks, traditional banks have struggled to keep pace and elevate their customer experiences to the level today’s consumers demand. Banks that continue to rely on one-size-fits-all communication risk alienating customers who crave deeper insights and tailored solutions.

However, AI-driven hyper-personalisation presents an unprecedented opportunity for banks to turn the tide. While concerns about data security and privacy are valid, technology providers today can offer solutions that adhere to stringent data security and privacy standards. By ensuring that all customer data is handled with the highest level of confidentiality and protection, complying with relevant regulations, and employing advanced security measures to safeguard data integrity, banks can confidently embrace this technology.

A dream scenario: your financial institution anticipates your needs, asks specific and pointed questions, offers proactive advice tailored to your goals, visually depicts scenarios and simulations, iterates and recalibrates them based on new insights during discussion, and then communicates the solution to you in a way that feels personal and relevant. A combination of AI algorithms and generative AI makes this possible by analysing vast amounts of customer data to uncover patterns and preferences, and even predict future needs and present them in a manner easily understood by customers. For instance, a bank could use AI to identify customers likely to be interested in a new investment product based on their financial history and risk profile. Instead of a generic e-mail blast, they could send a personalised message highlighting how the product aligns with that individual’s financial goals.

Hyper-personalisation also extends beyond marketing and product offerings; it can also change service interactions. AI-powered chatbots already handle routine inquiries, freeing up human agents to focus on complex and nuanced issues. These intelligent virtual assistants can now be trained to recognise individual customers and tailor their responses accordingly, creating a more seamless and efficient experience.

By putting the customer at the centre of their strategy, embracing the power of AI, and making it available to business stakeholders, banks can unlock a new era of customer-centric banking, where every interaction feels personalised, relevant, and valuable.

To seize this opportunity, financial institutions must do the following:

• Invest in data infrastructure: Hyper-personalisation begins with a foundation of robust data. Banks must prioritise developing sophisticated systems capable of collecting, analysing, and interpreting customer information in real time.
• Prioritise AI and machine learning: The true power of hyper-personalisation lies in the ability to learn and adapt. Hence, banks should embrace AI and machine-learning algorithms as the engines that drive continuous refinement of their understanding of each customer’s unique preferences and needs.
• Re-imagine communication strategies: The era of mass marketing is waning; instead, banks should invest in developing personalised communication channels that deliver tailored offers, insights, and advice based on each customer’s financial profile and aspirations.
• Empower front-line staff: Human interaction remains invaluable. Thus, by equipping customer service representatives with AI-powered tools, banks can provide them with a comprehensive understanding of each customer, enabling more meaningful and impactful engagements.
• Build personalised products and services: Innovation is key, and to truly differentiate themselves, banks must go beyond traditional offerings and create financial products and services that cater to the specific needs of individual customers. This could encompass personalised investment portfolios, tailored loan options, or unique rewards programmes.

By taking these steps, banks can transcend the limitations of traditional models and usher in a new era of customer-centric banking. As AI technology continues to evolve, banks that invest in this transformative approach will be poised to lead the industry, not just in terms of profitability but also in customer satisfaction, loyalty, and brand reputation. The future of banking is not simply personalised; it’s hyper-personalised, and the banks that embrace this reality will shape the financial landscape for years to come.

The writer is head of business (Asia-Pacific) at Newgen Software