From Data to Results: The Role of Personalization in Your Digital Banking Platform
Digital banking platforms have revolutionized the experiences account holders have with their financial institutions - by delivering more convenience, improving accessibility, and enabling banking from anywhere. One powerful strategy to enhance the user experience and drive engagement on digital platforms is through built-in contextual marketing. By leveraging data, predictive analytics, and behavioral monitoring tools, banks and credit unions can harness the power of contextual marketing to enrich personalization and relevancy to their account holders.
Contextual marketing, in the realm of digital banking, refers to the practice of delivering targeted marketing messages and offers to users based on their specific circumstances, behaviors, and preferences. It involves analyzing an account holder’s interactions, transactions, and digital footprint to gain insights. Here's how this practice amplifies personalization in digital platforms:
- Personalized Account Holder Experience: Account holders today expect individualized experiences from their financial institutions. Contextual marketing enables banks and credit unions to deliver tailored offers, recommendations, and relevant content that resonate with users’ unique needs, preferences, and financial goals. It shows that their financial institution understands and values their individual circumstances, enabling banks and credit unions to build stronger account holder relationships and drive user engagement and overall satisfaction.
- Increased Relevance for the Institution: Banks and credit unions have an opportunity to better retain digital banking users with timely and relevant offers and messages. Utilizing real-time data, financial institutions can identify user needs and preferences more accurately. For example, if an account holder frequently uses their digital banking platform for bill payments, personalized suggestions can be proactively offered for optimizing bill payment processes or introducing pertinent services like automatic payment reminders. Similarly, if an account holder is nearing retirement, suggestions for financial planning may be seen, whereas someone who is going to be entering the workforce may see different types of financial wellness messages linked to their financial story.
- Cross-Promotional Opportunities: Contextual marketing is another powerful tool for cross-promotional activities. By analyzing user data, banks and credit unions can identify opportunities to present relevant products or services based on the account holder’s financial situation and behavior. If an account holder uses their digital banking platform for mortgage-related activities, targeted offers for refinancing options or home insurance can be provided in tandem with current services.
- Improved User Retention: Delivering relevant and timely services through contextual marketing helps foster customer and member loyalty. By anticipating account holder needs and delivering personalized experiences, financial institutions can enhance user satisfaction and inversely reduce the likelihood of attrition. By delivering relevant messages and campaigns, account holders feel a sense of connection and understanding rather than ‘just another account holder’ at the institution.
- Resource Optimization: Personalization efforts also enable resources to be allocated more effectively. Rather than adopting a one-size-fits-all approach, financial institutions can focus their efforts on the most relevant and promising opportunities. Research studies, such as the 2022 McKinsey & Company report, state that personalized marketing can lead to a 10-30% increase in marketing ROI. By leveraging customer and member data and adopting a data-driven approach, banks and credit unions precisely target their marketing efforts, ensuring every marketing dollar spent yields favorable results. Moreover, personalization can also lead to an improvement in user engagement and satisfaction, reducing churn rates and the need for costly account holder acquisition efforts. This targeted approach ensures budgets are utilized efficiently and increases the likelihood of generating positive returns on investments.
Personalization isn’t new, but leveraging the data in new, creative ways will help banks and credit unions stand out with existing account holders while attracting new ones. Someone’s personal financial story, including transaction history, banking preferences, and other spending/savings patterns are all valuable data points that can be leveraged to enable financial institutions to serve their user base best. Combining historic data with real-time user behavior information provides a holistic profile for targeted marketing messages, enabling banks and credit unions to respond promptly to account holder needs at the most opportune time in their banking journey.
In today's highly competitive banking landscape, leveraging personalization is a must – and looking at new, creative ways to capitalize on user behavior data through predictive analytics will help institutions stand out key while maximizing an engaging user experience with tailored offerings and services.
NXT, Alogent’s unified online, mobile, and digital banking platform with consumer and business banking capabilities, is a flexible solution that enables banks and credit unions to easily incorporate personalization and marketing campaigns by leveraging data driven insights and user-behavior data. Combined with its scalability and extensive partner network to build a complete and complementary digital ecosystem, NXT is a robust, turnkey platform with out-of-the-box capabilities, and an SDK to extend customization potential.
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