Introducing you to the era of personalized banking

The way we approach banking has transformed, and the change is more pronounced than ever. The COVID-19 pandemic has pushed consumers towards embracing fintech companies, neobanks, and cloud banks. These entities have gained popularity due to their knack for providing a personalized, seamless experience across various channels. Traditional banks, in order to stay competitive, are realizing the importance of adopting widespread accessibility and reimagining their digital website personalisation strategy.

While most banks in North America have already made the shift to digital platforms, it’s no longer sufficient. The surge of fintech demands a higher level of personalization, catering to specific customer segments and individual needs. One of the best examples of such practice is Finastra Open Banking, which has successfully embraced website personalization as well as Drupal possibilities. 

Consumption shift and the data revolution

When we look back, we can find out that sharing your personal financial information wasn’t common at all. Everyone considered it a private affair. However, this trend has significantly changed with all the excessive data available on the internet today.

There is a new trend now. People buy stuff and share that information on social media. It is like displayed or exposed consumption. Such type of spending has caused the need for financial institutions to be able to meet people’s preferences and inclinations. Like cash back options, the opportunity to make online purchases, special programs for certain types of products, etc.

So, what does this lead to? Financial institutions of the past primarily focused on capturing the widest possible market to cover substantial fixed costs. In contrast, the new wave of fintech startups, digital banks, and bank-fintech hybrids can create highly personalized and specialized services that resonate with specific customers. Let’s delve into a few examples.

Personalization through fintech advancements

Artificial Intelligence (or AI) is deeply rooted in fintech solutions, helping them provide highly specific individual needs.

The advancements in technologies create opportunities for previously underserved segments of the financial market. It relates to individuals with poor credit histories or seniors struggling with soaring healthcare costs. Let’s examine some ways fintech is crafting highly tailored solutions to serve distinct market segments.

#1 Payment gateways

Payment gateways, the lifeblood of eCommerce, facilitate online transactions. They allow sellers to accept payments through a variety of methods, from credit cards to cryptocurrency. The eCommerce market has changed forever, and PayPal seems like some mundane thing.

#2 Digital insurance providers

Fintech startups are disrupting the insurance industry by offering aggressively competitive rates compared to traditional providers. InsurTech startups blend unconventional business models with highly personalized marketing campaigns to reach specific market segments.

#3 Investment and asset management

Imagine trading stocks without incurring commissions. Instead of charging per transaction, such companies monetize by selling trading data to high-frequency trade firms. This practice, though it may raise concerns, is prevalent in the investment and brokerage sector.

#4 Digital banking services

The pandemic has altered the digital banking industry significantly. Using digital banking, customers get all the needed reliability and flexibility tailored to their preferences. Moreover, all the services come at reduced rates due to reduced infrastructural expenses.

#5 Peer-to-peer funding

Peer-to-peer funding is like crowdfunding but for borrowing. This model allows for pre-approved borrowers and lenders to connect directly and exchange money through a secure platform. This way, they skip many red-tape stages and get straight to business, so to speak. Don’t you think that this method is amazing for startups and small businesses? They usually lack credit history to go to a traditional financial institution. Therefore, when banking and financial companies tailor such solutions to different groups, they are bound to be successful.

How to establish personalized banking services?

Creating personalized banking experiences requires robust mobile software capable of gathering and processing user data to improve interactions. Modern technology offers the tools needed to maintain personalized services effectively. How do you make it happen?

#1 Collect customer data

At the core of personalization lies individual user information. It’s vital to have a system in place within your banking application to collect and process demographic data, spending history, and details about the use of financial products. Fortunately, this data is already present in banking software. You just need to establish a mechanism for securely gathering, analyzing, and storing this information.

#2 Leverage additional information sources

Sometimes, the required information might already exist but could be stored in other internal systems. By connecting your mobile banking application to analytics software through an API, you can tap into this data. Furthermore, integrating your application with partner company software opens up even more exciting possibilities. 

#3 Big Data analytics tools

Processing vast amounts of incoming data manually is impractical. Considering the amount of users, it just seems impossible. So, what is the solution? We are lucky to witness the advancement of machine learning and artificial intelligence algorithms, and they are the answer. They help you with automated data analysis, presenting valuable insights to your managers in a format conducive to decision-making.

So, whether you’re updating an existing application or developing a new one, integrating these tools will enhance personalization capabilities. It’s about using technology to understand your customers better and provide services tailored to their needs and preferences. By doing so, you not only meet their expectations but also offer a smooth and satisfying banking experience.

Last but not least

In recent years, personalization approaches have been the top concern for all businesses, let alone financial ones. Customization, data analytics, machine learning, artificial intelligence, payment gateways, etc. Fifteen years ago, these words would sound really strange, and we could imagine the future where cars start flying, and we go to Mars for the weekend. This is our present. We are also welcoming you to a completely transformed financial landscape.