We live in an era in which the strategies of most sectors involve adapting as much as possible to the user. This would be much more difficult if it were not for digitisation, which is resulting in the generation of huge amounts of data worldwide. In fact, storage capacity is expected to increase by more than 16% by 2024. In this context, banks need to understand the importance of this data and take advantage of it to offer the best customer experience.
What do you see when you log into your banking app?
If we log on to our bank’s website or app right now, most of us will probably find our global position and a series of financial products on offer. If we navigate through the application we can access the financing part and use some kind of simulator to calculate loans, carry out different operations, take out a deposit, an insurance policy, and even a physical product depending on the bank we work with. The issue lieswhen it comes to knowing what you need and where to look, or which product to contract, with a lack of knowledge surrounding economics, finance, and savings. For example, not all loans or credits are the same, or maybe you don’t even need a loan but a savings plan to buy in the future. But then, what can the bank do for you?
Meeting customer needs
As I mentioned at the beginning of the post, the amount of information we have right now is overwhelming: search and browsing data, information on accounts and customer history, knowledge of the competition, a large part of their products and strategies, etc.
With all this data it is possible to aim for maximum personalisation and anticipate needs, offering a really useful and simple banking service.
Banking4You, the ultimate in personalisation
From the customer’s point of view, it is possible to create an individual personalised bank (Bank4You), in such a way that they feel, as soon as they enter the website, that this space is specially designed for them. To get to this point, it takes small steps and a change of approach, starting with changing the questions. People will probably not need a loan, they will need a car, a house or a bicycle. Given this need, the bank will offer the best personal solution to the client, from a loan to a financing plan, or even waiting when they hold a lot of credit.
In addition, the terms and conditions of loans and credits should also vary according to the client: some people will have had previous loans and have paid them off without any problems, have a stable salary or usually have a lot of money in their account. The conditions or interest rates for them should not be the same as in cases where there are previous references of delinquency or very little income,etc. When establishing these conditions, it will also be important to look at the competition and learn about their offers in order to try to offer a better product and thus avoid losing users.
Following the same principle, we could talk about other financial products such as current accounts. Generally, these have numerous fees and commissions, but wouldn’t it be in the interest of those who keep and move a considerable amount of money to eliminate them? By simple logic, the bank will want to retain its best customers, but in order to do so it must know who they are.
And if we talk about the deposit or investment world, something similar happens. Perhaps a person interacts with your application and is looking for a way to get a return on their money. If we know from previous information and references that this is a person who does not tend to borrow too much or is looking for stability, we could offer them a fixed-term deposit, from a more conservative position. However, if this is someone who likes to invest, we might opt for a variable deposit with higher risks but more possibilities of profit.
In short, you need to create a search engine that responds to real needs and not one that searches for different products in a static way. The bank must be able to create a specific product for the person in front of it, either physically or digitally, that is perfectly adapted to their preferences and what they are looking for. The bank must be able to change, to adapt its products to the needs of each of its customers and the situation they are in at any given moment. The bank must adapt to you, it must be your bank, a bank for you: Bank4you.
Elastic Bank: needs for changing processes
To achieve all these changes and this level of personalisation, changes are needed in two areas: processes and technologies. Processes must be digitised, automated and adapted so that, once the product is offered, it can be contracted digitally with all its characteristics. Even the steps to be taken will be different depending on the customer and the risk involved, etc. Therefore, finding the products and adapting the processes will be two tasks that go hand in hand. We will not only customise the characteristics of a product, but also its processes, which will have to be adapted to each client in each situation.
Technology to use the data
In terms of technology, this is essential to be able to manage the large amount of information we are faced with thanks to Big Data, Artificial Intelligence and other data collection and processing techniques. And, obviously, it will also be key to the digitisation of the processes mentioned above. Although a few years ago some tasks seemed tremendously complex or unachievable, today’s technology allows us to achieve amazing levels of personalisation.
A look into the future
If one stops to think about it, the future is becoming more and more present and approaching at a faster pace. The limits of personalisation are being explored and expanded by companies with immeasurable amounts of data such as GAFA or the marketplace giants and the threats in such a changing environment are continuous. The need for traditional banking is diminishing and so adapting and evolving is becoming a necessity rather than an option or a trend.
In recent years we have seen major changes and manoeuvres by large banks to change and create new forms of customer relationships, as well as new sources of income (with the creation, for example, of Market Banking, which offers physical products with their corresponding financial products). Although the evolution is enormous, one thing is clear: it cannot stop. The world is moving every day, the consumer is king and only those who understand him, fulfil his wishes and anticipate his needs will be able to maintain their competitive position in the market.