Banks have been providing personalised services for a long time. They offer differentiated services and various facilities for customers, especially high net-worth clients. In today’s digital age, personalisation has become more intense. Banks leverage data and analytics to predict customer needs and offer relevant interactions. Many customers trade personal data for such improved service. “Hyper-personalization” means doing the same in real time.

Banks that cater to customer expectations of hyper-personalisation avoid losing customers in today’s competitive landscape. Here are the ways for banks to meet their customers’ hyper-personalised communication needs.

1. Break down silos

Banks generate tons of data daily. But legacy systems and fragmented databases render most data unusable for analytics. Many banks still have paper-based processes. Some banks continue with legacy channels not integrated with the core banking operations. Most traditional banks remain incapable of cross-functional collaboration. 

To break down silos,

• Look beyond specific functions or departmental needs. Implement customer-focused strategies that align business processes with end customer needs. 
• Centralise data into a warehouse, and pull out the data needed for discrete customer use cases. Capture and organise the data needed to address such use cases. 
• Establish collaboration channels between IT and business managers. Strong day-to-day communication ensures smooth information flow. Team members can access confidential information on a one-off need basis without delay.

2. Collect data from external sources 

Successful hyper-personalisation depends on a comprehensive view of their customer. This depends on assimilating information from many sources and correlating data in real-time. Augmenting in-house data with data from external sources fill the gap. 

Use APIs. Getting information on any customer depends on data from third parties, such as credit card processors. Application Programming Interfaces (APIs) enable safe and easy data sharing with ecosystem partners. APIs make banking systems resilient and allow banks to move away from rigid monolithic systems. The quality of data used in communication with customers also improves.

Embrace open banking. Open banking is a collaborative ecosystem that allows third-party access to financial information. UK’s Open Banking Initiative and the EU’s Payment Services Directive further the cause. Adopting such standards gives banks access to high-quality, real-time customer data. Banks can target customers looking out for specific products at any time. 

The Monetary Authority of Singapore (MAS) API Exchange (APIX) collaboration platform offers the world’s first cross-border, open-architecture platform. The platform supports financial innovation and inclusion in ASEAN and elsewhere. 

Modern core banking technologies are API-based, modular, and support open banking. Traditional banks must take a giant leap towards digital transformation to catch up.

3. Ensure new technology adoption

Invest in AI. Emerging technology, such as artificial intelligence (AI), helps banks better understand customer behaviour. AI enables applying predictive models to make relevant offers across the customer’s choice of channels. However, AI is costly and resource intensive, and few AI models go beyond the proof-of-concept stage. Yet the investment is worth considering the potential rewards at the rainbow’s end if the bank has the resources to see it through.

• Focus on the backend. Many banks focus on the front end while neglecting the back end. A good front end is functional only with a robust back end. Customer data and digital experience platforms enable tight UX and backend integration. 
• Pay attention to analytics. Collecting data is useless without subjecting it to analytics. Good analytics tools gather relevant data, churn it in real-time, and offer actionable information. Make sure the analytic engine is capable of real-time analytics. Time is money; even a few seconds of delay could mean losing business to a competitor.
• Set up filters and other mechanisms to ensure the capture of relevant data. The analytics engine is only as good as the ingested data. 
• Focus on mobility. Mobile devices have become a vital touch point for hyper-personalisation. Smartphones, smartwatches and tablets enable customers to get things done on-the-fly. A combination of mobile banking and edge computing enables banking apps to process data at source and offer live insights. 

The success of a bank’s hyper-personalisation initiatives depends on all digital channels working in tandem. For instance, it will not work if the bank rolls out a state-of-the-art app, but its browser-based website is still legacy based, with no data sync.

4. Promote innovation

Technology is now a level playing field. As such, innovation has become indispensable for competitive differentiation. But blind innovation does not help. Successful innovation depends on

• Understand the customer. Today’s digital-savvy customers prefer self-service rather than wasting time with support agents. They also value transparency, privacy, and more control over their data. Innovation to personalise the experience on such lines delivers good results.
• Strive for dynamic personalisation over customisation. Until not too long ago, banks focused on customisation instead of personalisation. They offered hard-coded options to change the dashboard’s colour, sort reports by columns, and so on. Personalisation depends on delivering dynamic experiences that change in sync with customer behaviours. The application code, in such instances, adapts the expertise derived from new data. 
• Be mindful of localisation. The world is today a global village, but localisation still runs deep. Globalisation has improved access. But business success still depends on sensitivity to local customs and engaging in the local language.
• Overcome resistance to change. Banking has always faced regulations. The compliance-oriented and risk-averse nature of banking resists change. Adopting the next-generation technology needed to personalise customer experience invariably meets with resistance.
• Focus on relationships. At times, an over-focus on the individual misses out on the wider circle. For instance, people connect around familial ties, hobbies, and beliefs. Banks that understand these affiliations and connection patterns can personalise the experience better. 

Successful case studies of financial institutions innovating their way to successful hyper-personalisation abound.

• DBS’ iWealth app makes equity recommendations based on the customer’s investments.
• G+D’s personalised payment cards offer services centred around three popular themes – children, pets, and weddings. Such personalised touchpoints increase trust and reinforce brand loyalty.
• Venmo provides contextual information with every transaction. Users get to see details of the payee and the circumstances of the payment.

Today’s customers are fickle and demand instant decisions. They engage through the medium of choice and require a seamless Omni-channel experience. They rarely complain and instead leave. Hyper-personalisation enables banks to strengthen bonds with such customers and gain a competitive advantage.