Understanding hypersonalised banking

Hyperpersonalised banking is a customer-centric approach to providing personalised solutions to individuals at the most relevant time using data analytics. Some of the drivers that are fuelling this paradigm shift include: advancements in technology and its use in other industries, combined with the prevalence of smart devices, placing more and more pressure on banks to provide similar levels of personalised service.

In addition to this, even with customer willingness to share their data in return for a hyperpersonalisied offering tailored to their needs, a large proportion of banks are still unable to deliver this user experience.

With the advent of the new challenger and neobanks, it is becoming more difficult for the larger ‘traditional’ banks to maintain a competitive edge against their nimbler counterparts, who offer hyperpersonalised experiences from day one.

There is also a strong revenue case which links the maturity of a bank’s personalised offering with an increase in their revenue. This has been clearly evidenced in other sectors by organisations such as Amazon and Netflix. In addition to this, governments and regulators have greater expectations of banks to ensure that they are catering to the financial needs of society and, in particular, ensuring customers have sufficient access to mainstream financial products and services. One study showed almost 35% of adults are at risk of financial exclusion1.

Importance of hyperpersonalisation

At the heart of this paradigm shift is customer centricity, an approach to supporting customers so that they can make more informed decisions, which lead to better outcomes:

• Financial well-being
• Fostering stronger ties with customers
• Customer loyalty

Financial well-being

By banks knowing their customers intricately (through their KYC process and 360 views), they can provide the best products and services for their individual customers and potentially nudge them into a much stronger financial position.

Fostering stronger ties with customers

Providing customers with the most relevant products and services at the most appropriate time, allowing them to make better and more informed decisions, will ultimately build a more trustworthy relationship between customers and their bank. This is crucial, as trust in banks is vital for economic growth.

Customer loyalty

At a time when customers have no fear in moving from one bank to another, it is vital that banks do whatever they can to keep their customers loyal to their brand. Customers value positive experiences that help them make better and more informed decisions, which ultimately places them in a stronger financial position. Banks can leverage this by providing loyalty incentives which can help retain a higher proportion of their clientele in the longer term.

These are just some of the key factors that can help banks ensure they engage more deeply with their customers, build brand loyalty, increase customer retention, whilst also helping to increase revenue.