Monday, 27 May 2024

Hyper-personalisation is changing the banking experience

5 min read

By Chris Kapfer

The banking industry is using AI and data strategies to meet customer preferences focusing on digital culture, secure operations, and partnerships to overcome challenges and cultivate customer-centricity

  • Targeting customers with products that meet expectations
  • Overcoming challenges with digital culture, secure operations, partnerships
  • Curating meaningful propositions, embracing customer-centric culture

The banking industry is transitioning from traditional segmentation and micro-segmentation to hyper-personalisation, with the help of artificial intelligence (AI) and data strategies to deliver tailored experiences and make stronger connections with customers. Global banks have embraced this trend to understand and adapt to the customer’s changing preferences across various life stages. Banks are adopting customer-focused values, investing in technology, and forging strategic collaborations in order to get the most out of hyper-personalisation.

Targeting customers with products that meet expectations

Take for instance Singapore’s UOB, a bank that uses a ‘network-net-worth’ wealth model, to promote wealth services to customers according to their net worth. Over the past three years, UOB has developed about 70 machine learning (ML) models to spot potential wealth customers.

In 2022, Taiwan’s Cathay United Bank (CUB) launched its CUBE mobile banking app. It was upgraded into the CUBE app with better product planning, customer experience and services, and platform design. In the same year, CUB achieved remarkable success in customer growth, development and satisfaction. With the second-highest customer base in Taiwan, the bank has maintained a compound annual growth rate of 44% of active users, while also developing new features and functions in its digital channels to provide a more inclusive service.

Banks harness data and technologies to anticipate customer preferences and demands for personalised experiences. Hyper-personalisation encompasses segment-level customisation, where organisations align with customer aspirations, so every interaction leads to personalised products and services.

Overcoming challenges with digital culture, secure operations, partnerships

Globalisation and socio-demographic changes have compelled banks to adopt hyper-personalisation strategies to engage, retain, and deepen customer relationships. However, implementing hyper-personalisation presents its own challenges. To overcome these, banks cultivate a digitally-minded organisational culture that encourages experimentation and innovation, prioritising convenience, reliable and secure banking operations, forming partnerships to access third-party data, and preserving trust and data privacy.

Curating meaningful propositions, embracing customer-centric culture

Hyper-personalisation aims to address customer pain points by delivering value using AI-driven auto-savings products and partnerships with ecosystem players. Financial institutions foster innovation and agility, and drive digital transformations by decentralising decision-making processes and involving tech-savvy professionals to shape a customer-centric culture within the organisation. 

Keywords: Hyper-personalisation, Digital Transformation, Customer Experience
Institution: UOB, Cathay United Bank
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