Say My Name: How personalized customer experiences can elevate financial services

by Franklin Manchester and Julie Muckleroy

“Names are the sweetest and most important sound in any language.” Dale Carnegie’s words from nearly a century ago suggest an answer to a question troubling financial services firms: How can they take customer experience (CX) to a level that inspires brand loyalty?

In hard times, personalization can make or break a customer relationship. A McKinsey study found that three-quarters of consumers switched to a new store, product or buying method during the COVID-19 pandemic. It’s clear that, in these highly uncertain economic times, personalized customer experiences could spell organizations’ success or failure.

Of course, personalization is about so much more than remembering a customer’s name. It’s about building connections through tailored, authentic customer experiences. But how? In today’s “phygital” (i.e., physical + digital) world, much of that tailoring hinges on applying advanced algorithms to customer and other data – lots and lots of data.

Strategizing for the federation and alignment of data 

As much granular data as banks and insurers have on their customers, it’s breathtaking how often simple truths about customers can be missed. Enterprises wrangle dozens, if not hundreds, of internal and external data sources in their business decisioning. But it's rare for all business units to have equal access to data sources, much less a way to align around that data.

To achieve next-level CX, data must be uniformly available, open to all relevant parties and aligned to “speak a common language” – optimally on a common platform. 

For example, the data that helps validate a customer’s identity at account opening can later inform credit decisions, differentiate legitimate transactions from fraudulent ones, and fuel next-best-offer predictive analysis.  

Data doesn't just fuel a consistent customer experience. Full integration and orchestration can enrich a 360-degree view of the customer across the entire enterprise that helps drive customer loyalty and support long-term business success.

Embracing omnichannel

Today’s consumers want to do business how, when and where it’s best for them. Prioritizing one channel over another often results in a disjointed experience as the customer interacts across digital channels or in person. Do you remember a time someone mispronounced your name, or called you by the wrong name altogether? It’s an awkward and unpleasant experience. 

The same applies to banks’ interactions with their customers. Financial institutions possess enough customer data points that they should be able to make relevant offers based on the customer’s current buying habits.

For instance, let’s look at a fictitious customer’s credit card usage. Ashley recently put down a deposit at a bridal salon, paid a cake company and used her miles to book two airline tickets to Mexico.

We can infer from this transaction data that Ashley is preparing to get married. Leveraged appropriately, her bank could offer products and solutions relevant to that life journey. But unfortunately, many financial institutions miss these cues in buying behavior, losing the chance to connect the customer with timely offers relevant to them.

Another example? Most consumers still purchase and service their insurance through agents or brokers: 81% of Baby Boomers, 79% of Gen Xers, 84% of millennials and 69% of Gen Z, according to digital insurance network Agentero.

Most claims, however, are filed through an insurance carrier. When the customer used to interfacing directly with an agent is treated differently by a carrier, irreparably damage can result. A 2022 claims experience study by Accenture found that, among more than 6,700 policyholders surveyed, 30% of dissatisfied claimants had switched carriers in the past two years, while another 47% considered doing so. 

Consumers often forge long-term relationships with their banks and insurers, and they rightly expect to feel known and valued. Financial services organizations must embrace an omnichannel strategy to deliver seamless and consistent customer experiences, however and wherever the customer chooses to engage. 

Identification and integration of growth partners

No financial firm can serve each customer’s every need. It’s no surprise the industry is seeing an expansion of third-party partnerships, in which organizations band together to fulfill needs identified throughout the customer journey. Think of it as introducing a friend to another friend: “Have you met Ted?” 

This kind of introduction can go smoothly...or not. Banks and insurers should strive to identify the gaps in their offerings and “make friends” with organizations that help fill those gaps with their own offerings and solutions. And when they’re deploying their third-party APIs on the cloud, both partners should ensure they are aligned in how they’re defining the customer. 

Reinforcing resilience with personalized customer experiences

Saying "yes" to personalized CX isn’t as easy as pressing “1” on a customer service phone menu. It’s an undertaking that requires significant monetary and time investments and – when done well – breaking down silos to democratize, strategize and align across the organization to create a unified experience.

Looking ahead, according to a recent MIT Sloan Management Review (SMR) Connections study examining the best practices of highly successful CX teams, the next two years will bring big leaps. The global survey of more than 2,600 business leaders found that, among the “CX Champions” identified:

• 86% will have adopted personalization technology.
• 84% will have adopted real-time data collection.
• 81% will have adopted AI-powered chatbots.
• 72% will have adopted connected omnichannel experiences.

For CX leaders and laggards alike, it’s time to undertake that journey. Even as financial services organizations face budget cuts amid the current economic downturn, personalization across the customer journey stands to pay dividends.

What’s in a name? Not just the future of digital natives: perhaps the key to weathering a crisis here and now.