Bespoke Digital Banking: the power of Big Data and Predictive Analytics

As consumer expectations towards digital user experience are increasing, more and more banks are striving to provide great customer experience on their digital banking channels – online, mobile, and tablet banking. According to the EFMA - Capgemini World Retail Banking Report 2014, customers with positive experiences are more than three times more likely to stay with their bank than those with negative experiences.  Some banks have created tailored apps for some of their customer segments, e.g. dedicated mobile apps for the private banking segment or the youth segment. However, banks have the opportunity to do more than just provide a good customer experience in digital banking. With big data, predictive analytics and the unprecedented amount of data available from mobile devices, banks can tailor their digital banking experience on an individual level, and deliver a personalized level of service to their customers via online, mobile and tablet banking.

Banks can use analytics to tailor the digital banking customer experience based on the user’s personality and online behavior patterns. A good example is Extra Space Storage, the second-largest self-storage facility operator in the USA, which has built a website that - using real-time data - intuitively responds to particular types of customers by highlighting different actions for different customers. For example for a "fast and logical" customer, the "call now" action is made more prominent, whereas for a "slow and emotional" customer - who needs more human connection and affirmation during the buying process - the online chat box appears. The more confident the site is about the visitor’s personality, the more it will respond according to that customer personality type. This approach resulted in 24% increase in mobile conversions for Extra Space Storage.

In much the same manner, online behavior and personality type can be used by banks to better service the customer in mobile and online banking. Besides online behavior, banks can also use other information, e.g. the customer segment, buying patterns, location information or social media interactions to further refine that personality information for better service and targeting.  

Thus, by using this customer information, banks can personalize their digital banking customer experience by:

• Tailoring their digital banking functionality (e.g. a high net worth individual might be more interested in net worth information, while budgeting might be less relevant for him/her as compared to other customer segments);
• Tailoring the next best actions and call to actions based on the user personality types and customer context (e.g. customer location, time of the day etc.);
• Tailoring the language (banks might want to speak differently to a Generation Y customer as compared to a baby boomer);
• Tailoring the user interface (UI) based on the customer personality. Banks can use usability experts and A/B testing to determine which personality type responds to different UI layouts, menu structures or UI colors.
• Tailoring marketing. Big data analytics help banks utilize a wider array of data sources, and analyze all the data and get answers in seconds, rather than hours or days. Combining this with mobile banking allows almost real-time communication with the customer, and delivering messages that are relevant to the customer’s context  - where they are, what time of the day, what device they are using, what they want to do – all delivered at the right time.

Following this approach banks can provide an outstanding customer experience via online and mobile banking, not only to retain but also to increase their customer base, and to see significant gains in online sales.