Personalization will drive Revenue Growth in Financial Services

February 19, 2021 in Personalization

Personalization will drive Revenue Growth in Financial Services

Financial Service Providers (FSPs) have been targeting and tailoring customer microsegments for decades. Until recently, these capabilities had been sufficient to help these FSPs distinguish their institutions, build customer engagement and gain competitive advantage, but this advantage is being eroded. FSPs are leapfrogged by retailers and tech-savvy companies that put personalization at the center of their business models and successfully scale them to achieve significant performance gains.

Personalized relationships build trust. This used to be common in the financial services industry, as customers would visit physical branches and speak directly to friendly (and sometimes unfriendly) tellers. However, today’s consumers have moved away from this face-to-face approach, choosing instead to use an omni-channel approach, which includes ATMs, mobile and online banking – and even banks with very few physical locations.

BCG estimates that by personalizing its customer interactions, financial institutions can achieve as much as $300 million in revenue growth for every $100 billion in assets that it has. In Nigeria, this is potentially a ₦126 billion increase in industry revenue. 

In order to take advantage of this customer personalisation opportunity, Banks need to be able to segment their users based on trended transaction data and offer them products and services that specifically target these segments. This is much more valuable than the generic demographic data that banks have typically segmented with. 

For an industry expected to face stiff challenges in 2021 as a result of the economic downturn, personalized customer interactions can be a competitive advantage. 
For more information about creating personalised customer interactions, contact us for a quick conversation on how we can help.

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