In a context where forecasts predict a certain economic slowdown in 2023, the computational power of artificial intelligence has entered a digital marathon of huge proportions. After a number of years of hearing how disruptive AI is going to be in banking, 2023 will be the year in which the collaboration between fintechs and financial institutions can transform the banking landscape – and kickstart a whole new personalization journey.
An outlook powered by AI
Financial institutions need to think about investing in conversational AI to accelerate their digital banking advancements. Many credit unions have been ready to do so for a while: in Cornerstone Advisors’ “What’s Going On in Banking” study, 1 in 4 credit unions said they plan to deploy a chatbot in 2023, such as to help customers make investment decisions, plan for retirement, and manage their budget. But the quality that chatbot interactions provide cannot match consumers’ multifaceted needs and expectations in a foreseeable fintech future. Banks will need much more than this type of AI. Chatbots, in fact, can be defined as rule-based systems that simply perform routine tasks with general FAQs. The real game changer in this AI battle is personalized banking: technology continues to advance and consumers demand more tailored financial services. A kind of digital banking that is capable of transcending segmentation, and revolutionize the fintech future.
Contextualization above segmentation
When banks assume their customers’ desires based on their life stage, the risk is that the assumption will be too generic and inaccurate. For example, you can’t assume that a person turning 30 is necessarily interested in buying a house and offer them a mortgage – or solely target retirement-related products to a person in their 60s. According to Salesforce, 84% of people want to be treated as a person, not a number. That’s just where contextualization comes into play. To create effective personalized experiences, banks can now leverage data and analytics to anticipate their customers’ needs. Through predictive models, they can offer customized products and services, while outdoing the advancements of challenger banks and new entrants in the digital banking scenario.
For sure, the youngest generations are the most prone to personalization in the banking landscape. Looking at the young demographics, banks should see that, even though they still have a lot in common with their parents n terms of requirements, Millennials want a bank that can connect with them individually – and solve their unique problems. Even more as for Gen Zers, the most debt-averse generation, and the one scoring the lowest levels of financial literacy based on recent statistics.
On top of leveraging contextual journeys to reach these younger customers, banks should carefully listen to their life’s wishes and challenges with old – and yet timeless approaches.
Partnering with a fintech to succeed
Of course, economic conditions for many people are tough today – and getting tougher. With new economic uncertainties looming, it’s never been more crucial to be smart with money. There’s no better moment to educate your customers on their financial situation, and what can be done to improve their financial wellness.
In finance, as in so many areas of life, knowledge is power. Building strong financial literacy will empower your customers not just in the stock market, but in every goal they want to pursue.
As for the key benefits hyper-personalization will bring to your bank or financial institution, here are the 3 main ones:
- Revenue growth by improved product and service positioning, providing relevant offerings at the right time
- Customer loyalty becoming your customers’ primary bank
- Customer engagement because of a better fit to customer needs at a specific point in time
In order to achieve this, you can make the most of data-driven, customer centric experiences and address the unique needs and challenges of your diverse customer base. At Strands, we can provide you with the latest tools to stay on top of the game. Benefit from our revolutionary solutions to empower your customers with hyper-personalized insights, in real time.
Get in touch with us to achieve next-level contextualization, and gear up for a future of personalized experiences!