The Power of Personalization in Consumer and Business Banking

Allison Winters, SVP, Director of Marketing & Client Experience, Columbia Bank

In today’s world, personalization has become a key differentiator for businesses, and the banking industry is no exception. Whether in consumer or business banking, customers no longer want to be just a number; they crave experiences that cater to their individual needs and preferences. This trend is not only seen in banking but across various industries where personalization has become a crucial strategy for success. Celebrities and influencers who have mastered personalized marketing have set a high standard, showing that connecting with people on a personal level can significantly enhance brand loyalty and drive sales.

Celebrities and Influencers Who Have Mastered Personalized Marketing

Personalization has been a powerful tool for many celebrities and influencers who understand the importance of connecting with their audience on a deeper level. For example, singer Taylor Swift is known for her personalized approach to fan engagement. Taylor has built a loyal fan base by acknowledging and interacting with her fans on social media, often responding to individuals’ posts, sending personal messages, and even inviting fans to exclusive events. Additionally, she has allowed her audience to connect to her own interests. By giving fans a glimpse into her world, she is viewed as a daughter, a cat lover, a friend, a businesswoman—all attributes that allow fans to see a little bit of themselves in her. This engagement has not only solidified her fan base but has also turned her followers into continuing advocates, driving her brand’s success.

Taylor Swift’s strategy is a relevant example of how personalization can create a strong connection between a brand and its customers, ultimately building to increased loyalty into sales. Businesses that apply similar strategies in their customer interactions should expect to see similar benefits.

Why Personalization Matters

In the banking industry, personalization is more than just a recommendation—it is a necessity. According to a study by Accenture, 91% of consumers are more likely to shop with brands that provide recommendations that are relevant to them. In both consumer and business banking, this translates to offering products, services, and advice that align with financial goals, preferences, and behaviors. The impact to your business’ bottom line? McKinsey & Company reported that personalization can increase sales efficiency by up to 15% and boost customer satisfaction by as much as 20%.

As an employee of a service-focused community bank, personalization not only improves customer experience but also increases brand awareness. When customers feel understood and valued, they are more likely to trust and remain loyal to a brand. In banking, where we spend years building trust with our clients, a personalized approach can set a bank apart from its competitors, leading to long-term customer relationships and positive word-of-mouth recommendations.

Our Industry’s Unique Advantage in Personalization

Banks have a unique advantage when it comes to personalization due to the substantial amount of data we have on our customers. Every transaction, loan, and interaction provides telling insights into customers’ financial behavior, needs, and preferences. This data can be leveraged to create individualized experiences that resonate with customers, whether they are individuals managing personal finances or businesses handling their operations.

For example, banks can analyze spending patterns to offer personalized savings plans or investment opportunities for consumers, and they can design cash management solutions for business clients based on transaction histories. They can also use data to identify life events—such as the birth of a child, purchasing of a home, or retirement for consumers—and proactively offer relevant products or services. Additionally, personalization in banking can extend beyond products and services.

For instance, something as simple as addressing customers by their first names in emails or tailoring communications based on their transaction history can make a significant difference. A study by Experian found that personalized emails deliver six times higher transaction rates than non-personalized emails.

One brand that excels at personalization is Starbucks. Starbucks offers personalized marketing through its loyalty program and mobile app. By collecting data on customers’ purchase histories and preferences, Starbucks can offer drink recommendations, special offers, and rewards that are tailored to each coffee or Frappuccino lover. This personalized approach not only encourages repeat visits but deepens customer loyalty, as customers feel recognized when they interact with the brand.

Integrating Personalization Throughout the Banking Relationship

Personalization should be integrated into every stage of the banking relationship, from account opening to daily transactions and long-term financial planning, in both consumer and business banking. Want to start your personalization journey? Here’s some ideas:

  1. Onboarding Experience: When a new customer—an individual or a business—opens an account, banks should use the information provided to tailor the onboarding process. For instance, if a consumer indicates that they are saving for a home, the bank can offer mortgage options and savings plans. For businesses, if the goal is expansion, the bank can suggest financing solutions or cash management tools.
  2. Customized Communication: Beyond products, banks can personalize how they communicate with their customers. For example, using a customer’s name in emails, sending birthday or anniversary greetings, or tailoring messages based on past interactions can create a more personal and engaging experience for both consumers and businesses.
  3. Personalized Financial Advice: By analyzing a customer’s financial history and goals, banks can provide advice on investments, retirement planning, or debt management for consumers, and cash flow management, credit options, or growth strategies for businesses. This could be delivered through one-on-one consultations, personalized emails, and more.
  4. Proactive Customer Support: Personalization also extends to customer support. If a consumer frequently travels internationally, the bank can proactively recommend setting a travel alert, or send tips on how to avoid suspicious transaction flags. For businesses, the bank could monitor account activities and offer support during peak transaction periods or in anticipation of cash flow challenges.

Best Practices Around Personalization

While the potential of personalization is broad, it’s important for banks to approach it thoughtfully, so we don’t spook clients. Here are some best practices:

  1. Prioritize Data Security and Privacy: Banks must ensure that customer data is handled with the highest standards of security and privacy. Transparent communication about how data is used is essential to maintaining customer trust.
  2. Start with the Most Impactful Data: Not all data is created equal. Banks should begin by identifying the most impactful data points—such as spending patterns, life events, and financial goals—that can drive meaningful personalization for both consumers and businesses. Focusing on these key areas allows banks to offer relevant and valuable personalized experiences without overwhelming customers with irrelevant information. Start small and introduce new scenarios as time goes on.
  3. Organize Data Effectively: While we all have data, keeping it organized can be a bank’s biggest challenge. Data must be well-organized and easily accessible, so marketing teams can quickly pull and integrate data in its communications and service standards. Review data across various channels (online banking, branch interactions, etc.) and pull-out key fields to drive personalization.
  4. Focus on Value: Personalization should always aim to provide value to the customer. Whether it’s through tailored advice, relevant offers, or proactive support, the goal should be to enhance the customer’s experience and help them achieve their financial goals. When you focus on value, you can minimize the risk of a customer feeling like their privacy has been breached.
  5. Maintain a Human Touch: While technology plays a significant role in personalization, it’s important that this technology does not take away the meaningful connections we work hard to build. Personalization should feel genuine and considerate, not like a sales pitch. This can be achieved through thoughtful customer service, personalized communication, and maintaining a caring brand image. For example, personalizing communication doesn’t have to end with emails; it can extend to customer service interactions, where bank representatives are equipped with customer preferences and past interactions, so that they can have more meaningful and empathetic conversations.
  6. Continuously Refine and Adapt:
    Personalization is not a one-time effort. Banks should continually analyze customer data, seek feedback, and refine their strategies to keep content fresh, helpful, and meaningful.

Conclusion

Personalization is a powerful tool that can unlock meaningful client experiences and brand advocacy. By leveraging the vast amount of data at our disposal, the industry can meet the experiences provided by brands like Taylor Swift and Starbucks to exceed customer expectations.

Allison Winters is Senior Vice President and Director of Marketing & Client Experience at Columbia Bank.

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